According to the latest Global Commercial Property Survey from the Royal Institution of Chartered Surveyors, recovery in the United Arab Emirate continues to gain traction and Asia remains a general upbeat story, but in Europe headline indicators generally remain weak towards real estate, reflecting the on-going recession in the region.
Germany, Europe’s largest economy continues to be an exception in terms of the growth outlook and sentiment within real estate. It remains increasingly attractive to investors with the RICS Investment sentiment Index climbing from 18 to 22.
Though in other European markets, such as Spain, Greece or Poland, investment appetite for commercial property is actually improving, this has yet to fully translate into stronger expectations for capital values, as it actually happens in Belgium, Austria, Switzerland and Ireland.
In France and the Netherlands, tenant demand and investment enquiries are deteriorating at a faster pace. Available space is rising this quarter and rents and capital values are expected to decline further in the coming months.
‘The results of the survey show that the weak economic picture across much of Europe is continuing to be reflected in the lack of demand to occupy property space,’ said Simon Rubinsohn, RICS chief economist.
‘Not surprisingly in the light of this, the rental outlook remains depressed away from prime real estate in key centres. Meanwhile, the German market continues to be strongest performer on the continent on the back of the relatively buoyant macro picture,’ he added.
By way of contrast, further improvements in sentiment in both the occupier and investment segments of the UAE real estate market show that the tone in the property industry is continuing to gain ground. The picture in Brazil is rather more downbeat, particularly in the occupier market where the headline sentiment indicator dropped to –39 from –28. It has now been in negative territory for three successive quarters reflecting softer numbers on tenant demand and rent expectations as well as higher figures for inducements.
RICS says that this worsening trend chimes with the more downbeat tone to recent economic news flow. However the Brazilian investment market is continuing to display a greater degree of resilience with our data suggesting that property investors are for the time being willing to take a longer term view of the prospects for the economy.
The results for Asia demonstrate promise with Japan leading the way on the investment side while also delivering a strong result for the occupier market. The real estate picture in India holds broadly flat reflecting a degree of caution in the sector as the central bank grapples with the challenge presented by a subdued economy and volatility in the currency.
RICS also says that the results for the United States are encouraging with further evidence of rising investor appetite and...
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