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4th Quarter 2019 FNB Property Broker Survey

Commercial Property Broker Survey Respondances continue to perceive financial pressure to be the strongest driver of Owner -Serviced commercial property sales and movement of late.

Focusing on the keys drivers of movement and sales activity in Owner – Serviced properties, the survey results show financial pressure to be the biggest single driver and this factor has become slightly more prominent in the 4th Quarter of 2019 survey.

The respondents where asked to give their perception of the major drivers of the “movement and sales activity” in the Owner – Serviced segments.They estimate the percentage of movement and sales that they believe would take place for a particular reason, but the total percentage of all the reasons can add up to far more than 100 %, because businesses can be perceived to be selling or relocating for more than 1 reason. It isn’t an exact science, therefore, but it gives a broad picture and what comes out of it is the highest percentage of owner occupiers are perceived to be selling or relocating influenced by financial constraints/ pressures, i.e. – 44.11% in the 4th quarter 2019 survey, up from 39.5%  and 46.8 % in the 2nd and 3rd quarters of 2019 respectively.

This would appear to be very significant, followed by “ relocating” to a place with better transport, logistics and commuter nodes ( 28.18% ), relocating to be closer the business particular market ( 24.24% ) and looking for bigger permises ( 16.79%).

Accompaying this rise in selling motivated by financial pressure, we begun to see a further selling reason advanced which may also point to the financial pressure – related impact of a weak economy. Here we refer to the percentage of respondants citing the “ closure of a business” as a motive for selling.This percentage is still slow, but has risen from 1.4% in the 2nd quarter 2019 survey to 8.8% by the 4th quareter of 2019.

Examining where, by region, the greatest level of finanacial pressure related -selling or relocation is perceived to be, it turns out to be Cape Town, with 60.5% of sellers, but Tshwane (57.1%) not far behind. Greater Joburg (45%) and Nelson Mandela Bay ( 47.1%) are somewhat lower but still signifcant. However, Ethekwini metro’s respondants perceive that metro to have a far lower level of financial pressure- related property movement and sales in the Owner – Serviced Market, i.e. 30.2%


These high perceived percentages of financial pressure – related sales and movement in the Owner – Serviced Property Market, after 2 quarters of increase, appear reflective of the impact economic stagnation in recent years and tie in with recent trends in other economic data releases. Notable in this regard is acclerating growth with liquidations numbers, with the average year on year growth rate for total liquidations for the 12 months to November 2019 having been 27.2% compared with the 12 months from a year prior.

Ethekwini Metro appears to be an interesting “outlier”, though. It’s relatively low level estimate for the financial pressure related movement and sales suggests that to date it’s economy may have held up better than the rest of the regions through recent years of national growth stagnation.

Source : John Loots. FNB