Commercial property finance should offer much more than just capital
South Africa’s commercial property landscape is shifting. A combination of weak economic growth, elevated interest rates and a sector still recovering from the shocks of recent years has created a tougher playing field; but certainly not an unworkable one.
That’s according to John Loos, Senior Economist at FNB Commercial Property Finance, who says that, for developers and businesses with the right finance partner, significant opportunities still exist. “Despite the weak economy, we’re still seeing growth – provided you know where to look,” Loos explains. “However, success in commercial property is no longer just about accessing capital; it’s about working with a finance provider who understands where the market is heading and has the confidence to back you.”
It’s a philosophy that has seen FNB Commercial Property Finance consistently grow its commercial mortgage advances in recent years, at a healthy 15.4% year-on-year rate according to the most recent SARB data. This is very strong compared to the average market advances growth of just 4.9% over the same period, and reinforces the effectiveness of FNB Commercial Property Finance’s approach given that real economic growth has been below 1% over the past two years.
Makhosini Ndlovu, Head of Product at FNB Commercial Property Finance says these strong growth figures demonstrate the difference between a purely product lending approach versus one built on strategic partnerships.
He offers key attributes that should be considered when looking for a commercial property finance partner:
· An understanding of the market, not just the maths – Not all asset classes have the same underlying risk, and not all lenders keep up. Right now, industrial property, affordable student housing and rural retail centres are showing resilience. Offices, less so. “A good finance partner doesn’t blindly follow past patterns,” he notes, “they help you pivot towards areas with real momentum.”
· Strategic risk appetite backed by actual lending – FNB’s year-on-year advances growth of more than three times the market average isn’t just a number; it signals willingness to lend, even in difficult times, and based on careful risk management and long-term thinking. “When others paused during difficult times, we stuck to our commitment to back viable clients,” says Makhosini. “For example, we kept lending in KZN during the unrest, and we’re one of the few lenders currently actively funding Commercial Properties in the Eastern Cape.”
· Decentralised, on-the-ground decision-making – Property is local. Your finance provider should be too. Makhosini highlights that FNB’s decentralised model, with dedicated teams of experts in every major province, means decisions are made close to the deal. That translates into faster turnarounds, sharper risk assessments, and a real understanding of local dynamics.
· Custom structures and solutions, not cookie-cutter products – There’s no such thing as a standard deal. Whether you’re a developer building a logistics hub or a business owner acquiring your own premises, finance has to be tailored. “That’s why we don’t sell products,” says Makhosini, “we design solutions that fits the client’ Needs and cash flows. That includes flexible repayment terms, nuanced structuring. We are even the first Commercial Property Finance business that offers scored commercial property finance credit to fast-track deals under R12.5m.
· Long-term partnership, not transactional thinking – Your finance partner should back your growth journey, not just consider your balance sheet. “We want to grow with our clients, from a single property to a portfolio,” he explains. “That means understanding their broader business context, providing consistent support, and staying in the market when others retreat.”
“John” emphasises that it also means responsible lending. “We’re not here to trap clients in financial distress. While our advances are very strong, our credit losses remain low – because we lend with care and with foresight,” he emphasises.
· Scalable support for every deal – Whether you’re looking for R500 000 or R500 million, you deserve the same attention. FNB’s approach deliberately supports both ends of the spectrum, with tools to speed up smaller commercial property deals and expertise to structure complex loans. “We believe every client deserves tailor made structuring, regardless of size,” says Makhosini. “Especially since, with the right support, today’s small borrower may well be tomorrow’s property mogul.”
Commercial property finance isn’t just about funding; it’s about foresight and partnership. In a market shaped by uneven demand and economic pressure, businesses and developers need more than a loan offer – they need partners who understand where growth is happening, who can structure deals with precision and who are willing to stay invested for the long haul.
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