Best performing tenants, but ominous signs for the Office Market: while still showing the best tenant payment performance of the 3 major commercial property sectors at the end of 2020, it is not to say that significant financial constraints do not exist for the Office Sector. It appears likely that a portion of the financial pressure in the Office Sector can be seen in tenants downscaling their office space needs, translating into a rising vacancy rate through 2020 that is likely to continue into 2021. The TPN monthly preliminary data extracts on a sectoral basis indicate that the poorest performing Retail Property Sector has nonetheless continued its gradual improving path. However, the better performing Industrial and Office Sectors’ tenant payment performance lacked further improvement during the 4th quarter. This is evidenced by industrial tenant performance treading water in good standing performance for 3 consecutive months, while office tenant performance stalled for the last 2 months of the year. So, like the economic numbers, rental data has pointed towards a slowing pace of recovery late in 2020.
