Commercial property owners told not to sell

Commercial property owners have been told to weather the COVID-19 storm and not sell their properties for liquidity purposes as this might not be the best time to sell.

Shane Padayachy, the property investments area manager at Business Partners, said that the South African commercial property sector has taken a significant knock in the midst of the COVID-19 crisis but that there was hope at the end of the tunnel.

“Without a doubt, the office market has taken the biggest hit with so many people realising during lockdown that they can work from home, followed by the retail market to a lesser extent, having been impacted by the increased uptake in online shopping,” Padayachy said


“But the market will recover, so property owners should hold off on selling until it does, unless they absolutely have to.

“It’s just a matter of when the economy begins to see a turnaround, which will dictate when the commercial property market recovery will come about.”

The country’s commercial property industry is said to have lost as much as R8-billion in rental income over the lockdown period. The recent COVID-19 lockdown was a major production side economic shock, arguably hitting businesses far harder than households to date.

The weak economy thus appears far more an influence for the commercial property sector than low interest rates.

The office market was already oversupplied before the emergence of COVID-19 and the working-from-home concept just made it worse.

John Loos, the property sector strategist at FNB, said surveys point towards many companies planning to downscale on office space.

“But the COVID-19 lockdowns have probably given the scale of working from home a massive boost for another reason over and above forcing people into getting used to it,” said Loos.

“The lockdowns have also contributed to a very deep recession, putting significant financial pressure on many businesses across the world.

“Many CFOs will thus likely be eyeing out cost-cutting opportunities and reducing the amount of costly office space owned or leased by their companies would surely be one such potential opportunity.”

Author


Latest News

Trending

Sponsored Content

Company News

   Loading latest Press Releases...