The Month in Review April 2021
Evidence of Market Recovery in Retail & Industrial – Office in Major Trouble
The FNB broker survey provides a decent indication of activity and sentiment in the Commercial Property Market. This measurement is based on a survey from several brokers, and they rate rentals and general activity in the various sectors. Their overall index shows that in terms of recovery, the industrial sector leads the pack and it went from 4.5 (out of 10), in the last quarter of 2020 to 6.51 in the first quarter of 2021, while the retail sector jumped to 5 (over 3.65 in Q4 of 2020). Office sector, on the other hand, is showing real signs of being in trouble having declined from a low of 3.7 in the hard lockdown to 3.49 in the first quarter of 2021. The full FNB survey is described in the article below.
At Commercial Exchange we are seeing evidence of a turnaround in demand for properties for sale, particularly in the retail sector with two offers coming in at asking price. Shopping centres which have been in the market for many years in the neighbourhood centre category with extends ranging from (±10 000m2 to ±20 000m2) within the R 80 to R 100 million range. We are still seeing good demand for vacant Office buildings for conversion to Residential and we also saw some good offers coming for these buildings.
There is also an uptick in the low-cost housing development market, with Social Housing become a reality in many neighbourhoods, developers start picking up some of the vacant Office buildings for redevelopment. These extend from CBD to various neighbourhood areas in key locations.