Commercial property building statistics point to weakening in the future

NON-RESIDENTIAL building statistics hinted at a slowing down in commercial building activity in 2022, revealing that the levels had never fully recovered from the 2020 lockdown times, FNB Commercial Property finance property sector strategist John Loos said on Friday.

The Statistics South Africa (StatsSA) February 2022 release of non-residential building plans data pointed to a mildly weakening picture for the commercial property building sector early in 2022, he said.

The square meterage of total industrial, retail and office space building plans passed fell by -66.25 percent year-on-year in February 2022, after a +103.85 percent growth spike in January.

The February 2022 level of plans passed was still -41.1 percent down on the February 2020 pre-lockdown level.

The broader trend on a 12-month moving total basis indicated +11.15 percent year-on-year increase in the 12-month moving total to February 2022.

However, this represents a slower year-on-year growth rate than the +38.14 percent for the 12 months to January 2022, while the total plans passed for the 12 months to February was -11.4 percent down on the total plans passed for the 12 months to January.

“Early signs are thus emerging of a slowdown in non-residential building activity approaching,” he said.

Post-lockdown levels of plans passed had remained well-below preCovid-19 levels, he said.

Square metres of plans passed for the 12 months to February 2022 were -23.3 percent below the 12 months to February 2020, and -38.9 percent down on the total passed for the 12 months to February 2018.

Building completions, typically tracking plans passed with a lag, also recorded year-on-year decline in February 2022 to the tune of -26.52 percent, after a slight +5.2 percent year-on-year increase in January.

“While total square meterage of commercial buildings completed for the 12 months to February 2022 saw accelerated growth, slowing growth in plans passed suggests that there may be some slowing in building activity and completions later in 2022,” said Loos.

Office space planning and completions remain the weakest area of overall non-residential building levels, remaining low compared to pre-lockdown levels.

Office plans passed fell by -58.96 percent year-on-year in February 2022 off a very low base a year prior.

For the 12 months to February 2022, square meterage of retail space plans passed were down -20.4 percent year-on-year.