Share
TPN Credit Bureau: How the return-to-office is impacted by slow vaccination
With the negative impact that Covid-19 has had on the property sector, there is an oversupply of vacant properties. The dynamics in the residential market are driving down rental prices, in what is now a tenant’s market. And according to the TPN Credit Bureau’s latest vacancy survey, Landlords have a more pessimistic perception of the market. Joining CNBC Africa to discuss the findings is Michelle Dickens, CEO at TPN Credit Bureau.
Thu, 24 Jun 2021 17:43:06 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Challenges in the residential market due to oversupply and high vacancy rates
- Improvement in tenant payment performance with gradual recovery expected
- Dependence of return-to-office strategy on vaccination rollout and potential shift to hybrid work model
The property sector has been significantly impacted by the ongoing Covid-19 pandemic, leading to an oversupply of vacant properties. The TPN Credit Bureau has conducted a thorough analysis of the residential market, shedding light on the payment performances of tenants and the dynamics of the commercial market. According to Michelle Dickens, CEO at TPN Credit Bureau, the data collected from clients on a monthly and quarterly basis paints a concerning picture of the market. The Q2 vacancy survey revealed a deteriorating demand for residential rentals coupled with an increase in supply, resulting in a high vacancy rate. The lockdown restrictions and job losses have further exacerbated the situation, with tenants facing financial vulnerability and moving back with family and friends. However, there is a glimmer of hope as the vacancy rate seems to have stabilized at 13.1%, indicating a potential for recovery in the market. Despite the challenges faced, there are signs of improvement in tenant payment performance, especially in the residential sector. The data shows a gradual increase in tenants settling their rent, though certain segments like tenants below 3000 rent and those above 25,000 per month continue to face challenges. On the commercial side, the situation is slightly different, with only 63% of tenants in good standing with their rent. The retail sector has been hit the hardest, with a decrease in tenant payment performance. The commercial sector continues to struggle, with 12% of tenants not paying rent, highlighting the challenges faced in this segment. The slow improvement in payment performance indicates a long road to recovery for the commercial sector.
The return-to-office strategy for office tenants remains a topic of discussion, with the vaccination rollout playing a crucial role. Office tenants have shown to be the best performing segment, with 69% in good standing. However, the retail sector continues to face challenges, with only 61% of tenants in good standing. The ability to bring people back to the office is heavily dependent on the progress of the vaccination rollout and the containment of the current wave of the pandemic. The hybrid work model has become a temporary solution for many organizations, but the question remains whether this will become a permanent shift in the work culture. The return-to-office trend is closely tied to the vaccination rates and the overall recovery of the economy.
Looking ahead, the outlook for the residential and commercial property markets remains uncertain. While there are signs of stabilization and improvement in tenant payment performance, the recovery process is expected to be gradual. The impact of slow vaccination on the return-to-office will continue to shape the dynamics of the property sector, with landlords facing challenges in managing vacancies and rental prices. The TPN Credit Bureau's analysis provides valuable insights into the current state of the market and offers a glimpse into what the future may hold for property owners and tenants.
SIGN UP FOR OUR NEWSLETTER
DAILY UPDATE
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.