Commercial tenants show improving payment resilience

The TPN Commercial Rental Monitor for Q1 & Q2 2025 shows a resilient commercial property sector, with national tenant good standing rising to 76.8% by end of Q2 — the strongest since early 2020. Rental escalations have moderated, easing from a peak of 4.7% in Q3 2024 to 3.61% by Q2 2025, as landlords balance income growth with tenant stability.

Performance varies by segment and region. Large tenants (R50,000+ rentals) lead with 80.73% in good standing, while smaller tenants remain under pressure. Storage and industrial sectors outperform office, and the Western Cape leads provincially with 85.2% good standing and a 4.55% escalation rate.

Despite improving payment behaviour, partial and late payments continue to strain landlord cash flows, reinforcing the need for data-driven risk assessment and cautious escalation strategies.