{"id":791714,"date":"2024-09-21T07:00:00","date_gmt":"2024-09-21T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=791714"},"modified":"2024-09-20T16:06:02","modified_gmt":"2024-09-20T14:06:02","slug":"turn-for-offices-in-south-africa-as-companies-make-huge-changes-to-work-from-home","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/791714\/turn-for-offices-in-south-africa-as-companies-make-huge-changes-to-work-from-home\/","title":{"rendered":"Big turn for offices in South Africa as companies make changes to work from home"},"content":{"rendered":"\n

The office property market in South Africa is seeing an increase in sales activity, with some companies making huge changes to bring their employees back to the office.<\/p>\n\n\n\n

According to the latest Broker Business Confidence Index, the percentage of respondents experiencing satisfactory conditions increased from 30% in Q2 2024 to 44% in Q3. <\/p>\n\n\n\n

The notable increase in satisfaction levels comes from a survey done in early August, which was the first to follow the creation of the market-friendly Government of National Unity (GNU). <\/p>\n\n\n\n

In addition to the election result, many also expect the South African Reserve Bank to start cutting interest rates. The central bank is widely expected to cut when it meets later today, September 19. <\/p>\n\n\n\n

That said, the most recent level of brokers’ business confidence does, however, remain weak, with 56% of respondents unsatisfied.<\/p>\n\n\n\n

Although confidence is improved, the recent level suggests that the broader and business community is not getting ahead of itself.<\/p>\n\n\n\n

The economy is still stagnant and fluctuates between contractions due to load shedding, logistics constraints, and elevated interest rates. <\/p>\n\n\n\n

Service delivery issues are also significant constraints on a local government level, while economy-wide infrastructure investment, upgrades, and maintenance are insufficient. <\/p>\n\n\n\n

That said, the SARB’s expected interest rate cuts should add some mild stimulus in the form of local interest rate reductions. Some economic growth will also come from foreign sources as global interest rates also decline.<\/p>\n\n\n

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Offices are improving<\/strong><\/p>\n\n\n\n

When brokers were asked to rate sales activity levels on a scale of 1 to 10, the average rating of the group of respondents was lower in two of the three categories.<\/p>\n\n\n\n

Brokers were most optimistic about the Industrial and Warehouse Property Market despite the market’s rating dropping slightly further in Q3 from 5.27 to 5.23.<\/p>\n\n\n\n

Retail Property also declined slightly from 4.41 to 4.26 in Q3, notably down from its multi-high of 4.9 reached at the end of 2023. <\/p>\n\n\n\n

The Office Property Market rating, perceived as the weakest of the three markets, improved, rising from 3.54 in Q2 2024 to 4.15 in Q3. <\/p>\n\n\n\n

That said, it remains below its multi-year high of 4.29 in the third and fourth quarters of 2023. <\/p>\n\n\n\n

FNB’s survey also examines sales over two quarters due to the smaller sample size when it looks at sales activity. <\/p>\n\n\n\n

When it comes to metros, Nelson Mandela Bay (5.38) had the strongest sales activity in the office market based on a two-quarter average, followed by Cape Town (4.37)<\/p>\n\n\n\n

However, Gauteng’s sales activity is still incredibly weak, with Greater Johannebsurg and Tshwane only recording 3.62 and 3.50, respectively. <\/p>\n\n\n\n

eThekwini was also the worst performer of all the metros, scoring 3.22.<\/p>\n\n\n

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Respondents were also asked if they had perceived sales to have increased, stayed the same or decreased in the last six months compared to the previous six months. <\/p>\n\n\n\n

With this question, the broker perceptions indicate a mild strengthening from the six months in all three markets. <\/p>\n\n\n\n

The Office Index saw a massive +24 increase, far more than the +8 in the retail index and +7 increase in the industrial index. <\/p>\n\n\n\n

“These readings are seemingly at odds with the direction of recent sales activity ratings, but that is not uncommon,” said FNB. Getting sales activity ratings exactly consistent is impossible due to the changing perception of brokers.<\/p>\n\n\n\n

That said, the office market’s +24 increase correlates with the sales activity rating for the office market, which is actually higher. <\/p>\n\n\n

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Fighting work from home <\/strong><\/p>\n\n\n\n

The increase in sales activity in the office space comes amidst a push from companies to bring their employees back to the office.<\/p>\n\n\n\n

That said, companies are making some compromises to ensure their employees return to the office. <\/p>\n\n\n\n

Chaim Bronstein, head of the commercial department at Firzt Realty, said that many employees overseas or threatening to equity or preceding a promotion so they don’t have to return to the office full time. <\/p>\n\n\n\n

Few corporate employees can do this, but many are negotiating more favourable working hours or conditions.<\/p>\n\n\n\n

\u201cMany are now working on a ‘hybrid’ schedule, for example, which allows them to divide their work-week between the office and home,” said Bronstein<\/p>\n\n\n\n

“Others are working onsite in the mornings and remotely in the afternoons. And an increasing number are persuading their employers to implement physical changes to make onsite work more attractive.<\/p>\n\n\n\n

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Companies making huge changes to fight work from home in South Africa<\/a><\/blockquote>