CAPE TOWN - Activity declined in the industrial, retail and office property markets in the fourth quarter of 2019 due to online shopping and general economic weakness, a survey has found.
The FNB Commercial Property Broker Survey of fourth quarter rental activity in 2019 showed that of the three property classes, industrial property returned a reading of +16points, implying that 16 percentage points’ more respondents perceived an increase in rental market activity than those who perceived a decline. By comparison, the readings in the retail and office markets pointed weaker. Offices returned a negative -7points reading, and retail a negative -13points, in line with their decline in activity ratings in the previous two quarters.
On vacancies, the retail property sector had a forth quarter reading of +27points, indicating that 27 percentage points’ worth more respondents perceived vacancy rates to have risen, than those perceiving a decline.
The industrial property reading of +28points was virtually the same as retail, while the office property reading was the highest with +33points.
“The aggregate perception of rising vacancy rates was thus noticeable across all three property sectors," FNB said in a statement. “Economic and political uncertainty” was the main issue cited by respondents. In the case of office space, 29percent cited this factor as an issue, 27percent in the case of industrial property, and a more significant 39percent in retail.
The most positive activity rating was recorded in the warehouse sector, while the weakest response, however, came from the retail sector, where the activity rating declined from 5.85points in the 3rd quarter to 4.92points in the 4th quarter.
Thirteen percent of respondents pointed to online shopping having a negative impact on the numbers of visitors to malls. “While the respondents as a group lean mildly towards strengthening activity in the near-term, a strongly negative picture comes out in their response regarding the key issues in the market, seasonal factors aside, with far more pointing towards weak and uncertain economic conditions,” the survey found. The survey was conducted with a sample of commercial property brokers in and around the six major metros of SA.