16:47 Ongoing economic uncertainty further weakened commercial real estate markets | |
RICS Global Commercial Property Survey Q3 2011
Ongoing economic uncertainty further weakened commercial real estate
markets around the world during the third quarter of this year. In Europe, while Germany and Russia remain robust, other usually strong performers such as France have started to falter, says the latest RICS Global Commercial Property Survey issued today (4 November 2011). The report indicates that negative sentiment spread across the globe, with more than half of the countries surveyed reporting falling tenant demand and rising supply during the third quarter. Again, China continues to be the star performer, while Russia, Germany, Poland and the Czech Republic also recorded largely positive results. In Europe, Germany seems the best placed to withstand the ongoing euro area crisis, which translates into mostly positive results for its commercial real estate market. Though slightly less so than earlier this year, indicators for both rental and capital value expectations remain upbeat, and respondents also anticipate a slight rise in investor demand over the coming months. The situation in the Russian market is largely similar, with occupier demands and new construction sites still on the rise, albeit at a slower pace. Predictably, the continuing instability of global financial markets further hampered the commercial real estate sector in many Western economies. The intensification of the euro debt crisis has seen confidence in Western Europe collapse from July to September 2011. In that context, steadier markets such as France have started to waver. French RICS members who responded to the survey also saw a sharp drop in tenant demand (from +22 to -30) while available space continued to rise. Investment also plunged into negative territory (from +20 to -17). Additionally, all indicators for the coming quarter are pessimistic. Unsurprisingly, the survey also shows unequivocally negative results for Greece, Italy, Portugal, the Republic of Ireland and Spain. In each of these countries, occupier demand has fallen, supply is on the rise and both rental and capital value expectations have weakened compared to the second quarter. Commenting on the survey, Simon Rubinsohn, RICS Chief Economist, said:"Overall, confidence has definitely taken a knock given the considerable levels of uncertainty in financial markets around the world and the intensification of the euro area crisis. That said, there remain key areas of resilience – China, Brazil and Russia – and we have seen positive momentum in several other countries as well, Japan most notably. Although we doubt that the developing economies can completely insulate themselves from the challenges facing the West, our suspicion is they will continue to outperform and this will be reflected in real estate markets.” | |
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