Broker Business Confidence Resumes Its Upward Trend
John Loos
Broker business confidence resumes its strengthening trend, after the prior quarter’s weakening.
Methodology:
The FNB Commercial Property Broker Survey assesses a sample of commercial property brokers operating in and around South Africa’s six major metros: the City of Johannesburg and Ekurhuleni (Greater Johannesburg), Tshwane, eThekwini, the City of Cape Town, and Nelson Mandela Bay. Given FNB Commercial Property Finance’s strong focus on the owner-serviced market, broker respondents are selected based on their involvement in this segment. However, a portion of respondents also engage in the developer, investor, and listed property markets.
This report focuses on the part of the survey where respondents rate their perceptions of the buying and selling market’s activity levels (as opposed to the rental market) on a scale of 1 to 10, with 10 representing the strongest activity level.
Broker Business Confidence Improves in Q3 2025:
Before assessing activity level perceptions, respondents are asked whether they find current business conditions “satisfactory” (yes/no).
In Q3 2025, the percentage of brokers who viewed conditions as satisfactory rose significantly — from 40% in the previous quarter to 60% — marking a strong rebound in sentiment following the prior quarter’s decline. This survey was conducted in August 2025, shortly after the South African Reserve Bank’s (SARB) July decision to cut interest rates by a further 25 basis points, following a similar move at its late-May Monetary Policy Committee (MPC) meeting. This renewed rate-cutting cycle likely boosted property demand, serving as a key catalyst for the resurgence in broker business confidence during the quarter.
Sales Activity Ratings by Major Property Class:
All three major property classes recorded higher average activity ratings in Q3 2025 compared to the previous quarter.
- Industrial and Warehouse Property Market: Remains the strongest segment, rising from 5.59 to 6.40.
- Office Property Market: Improved from 4.67 to 5.24.
- Retail Property Market: Increased slightly from 4.47 to 4.70 but remains the weakest of the three sectors.
These increases reflect a reversal of the Q2 2025 results, where all three sectors showed declines in sales activity ratings.
Broker Perceptions of Sales Activity Over the Past Six Months:
Because each quarterly survey draws a new sample of brokers, respondents are also asked whether they perceive activity levels to have increased, declined, or remained unchanged compared with six months prior.
From these responses, FNB compiles an index where:
- “Increase” = +1,
- “Unchanged” = 0,
- “Decrease” = -1.
The resulting scale ranges from +100 to -100.
For Q3 2025:
- Office Property: +31 (strongest improvement)
- Industrial Property: +23
- Retail Property: 0 (unchanged)
These readings align with the current activity ratings, suggesting that brokers perceive strengthening activity in the Office and Industrial sectors, while Retail remains stable but subdued.
The Office Market’s index score of +31 indicates the fastest perceived recovery, even though its overall activity level remains below that of Industrial. Retail property, in contrast, continues to lag behind both sectors.
Concluding Remarks:
Industrial property remains the strongest of the three major commercial markets, supported by low vacancy rates and superior returns. Demand is driven by the ongoing shift toward e-commerce, which has increased requirements for warehousing and logistics space, even amid elevated levels of new development.
The Office Market, which has shown renewed strength after years of weakness, benefits from improved affordability due to sustained real (inflation-adjusted) rental and valuation declines. Coastal metros such as Cape Town and eThekwini are experiencing falling vacancy rates, supported by growth in the call centre and business process outsourcing sectors.
In Gauteng, particularly Greater Johannesburg, there is growing demand for older office buildings for conversion into residential or mixed-use developments. Brokers estimate that 21% of total national office sales in the first three quarters of 2025 were motivated by such conversions — rising to 38% in Greater Johannesburg. Retail property now ranks as the weakest of the three major sectors. The market remains constrained by low consumer confidence and a sluggish economy. The FNB-BER Consumer Confidence Index remained deeply negative in Q3 2025, weakening from -10 to -13 quarter-on-quarter, reflecting persistent pressure on consumer spending.
John Loos – Senior Economist – FNB Commercial Property Finance. He writes in his personal capacity.
