Emerging markets edged out developed economies for 2nd quarter commercial real estate demand. Except for France, commercial markets in the UK and throughout the euro region suffered from fiscal tightening, while government market-cooling efforts in China had less of a negative impact on demand. See the following article from Property Wire for more on this.
Commercial real estate in emerging economies has outperformed the Euro zone and the UK in the second quarter of 2010, according to the latest figures.
Property markets in the more dynamic economies of South America, Asia and Eastern Europe are seeing increasing demand says the Global Property Survey from the Royal Institution of Chartered Surveyors.
Occupier demand is rising in the majority of countries across the globe with the notable exception of the UK and euro zone countries where the tough measures that have been taken to reduce fiscal deficits appear to be having a more pronounced impact on the appetite of businesses to take up new space.
But France is bucking the negative euro zone trend with more material signs of an upturn in sentiment towards real estate reflecting, in part, the relatively resilient performance from the domestic economy, the report says.
Significantly, surveyors in the US reported a rise in tenant demand across all three sectors for the first time in three years, it adds.
Brazil is leading the way with the net balance of surveyors reporting a rise in occupier demand increasing from 70% to 85% with markets in Peru and China also performing well.
In contrast, demand in the UK turned negative for the first time in a year with the net balance falling from a positive 14% to a negative 4% while the net balances in Spain, Germany and Greece are all in negative territory.
Transactions fell in the UK for the first time in a year with the net balance of surveyors reporting a fall in activity sliding from a positive 24% to a negative 5%. More surveyors again reported a drop than a rise in activity in the United Arab Emirates and Greece.
Indicators in China still remain strong despite measures introduced by the Chinese government to address the property boom. Indicators for occupier demand, rental expectations and the number of investment bidders per property all remain firmly in positive territory. Elsewhere in Asia, the latest numbers from India suggest a strong showing from real estate in the second quarter despite the increase in interest rates.
Looking forward into the third quarter of 2010, sentiment towards capital values is particularly strong in France, Peru and Brazil while surveyors are most optimistic on rental increases in Brazil, Hong Kong and Peru, the report adds.
The research also shows that new development starts are rising in Brazil, Peru and Argentina. Surveyors report the first decline in Japanese yields since 2007, investment bidders per property rose at a faster pace in the US and capital values are still declining in Ireland, Spain and Greece.
‘The real estate world continues to be split broadly speaking between the emerging and developed economies. Strong growth in many of the former, including the likes of Brazil, Hong Kong and India, is continuing to boost demand for new space from occupiers as well as encouraging investment activity. Meanwhile in many of the latter, fiscal retrenchment allied to bank deleveraging continues to place significant obstacles in the way of a meaningful recovery in the commercial property market,’ said RICS chief economist Simon Rubinsohn.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.