South Africa's commercial property recovery has hit a wall. FNB's latest broker survey shows satisfaction with the market crashing to 39% in the second quarter of 2026, down from 69% just three months earlier, as a weaker economy and geopolitical tension knocked business confidence.
FNB senior economist Siphamandla Mkhwanazi ties the slump to higher operating costs linked to the Middle East conflict and the interest-rate response that followed. It is the same deterioration showing up across the wider economy, not a property-only wobble.
Offices, still the problem child
The weak spot stays where it has been for years: offices. Empty desks, limited tenant expansion and hybrid working keep dragging on demand. In Johannesburg, landlords are giving up on some buildings altogether, with residential and mixed-use conversions now making up about 43% of office deal activity as owners repurpose space nobody wants to rent.
Where it is still working
It isn't all gloom. Industrial and logistics stayed the strongest corner of the market, propped up by demand for warehousing and supply-chain space. Retail kept recovering too, with Cape Town and Nelson Mandela Bay leading the way.
FNB still sees the broader economy inching forward, from about 1.1% growth in 2025 toward 1.2% this year. But until the rate picture settles, brokers are likely to stay cautious, and the office market will keep testing how much reinvention it can take.
