Commercial property transactions rose across the majority of the globe with Peru, Brazil and Singapore leading the way. With generally low interest rates and relatively high yields, investors have continued to find commercial property an attractive proposition. Elsewhere, transactions rebounded in the USA for the first time in three years with the net balance of surveyors reporting a rise in transactions moving from a negative 22% to a positive 13%. By way of contrast, more surveyors again reported a drop (than a rise) in activity in the UAE and Greece.
The increased level of transactions is providing support for a recovery in capital values. In Brazil, the net balance of surveyors reporting a rise rather than a fall in capital values jumped from 25% in the fourth quarter of 2009 to 63% in the first quarter of 2010. Significantly, the recovery has started to move into some parts of Eastern Europe with the net balance of surveyors reporting on capital values turning positive in Russia, Poland and the Czech Republic.
Despite this, the availability of real estate for occupation continued to rise across 90% of the globe; Australia, Hong Kong and Poland are notable exceptions to this trend.
Surveyors are confident that the emerging economies, particularly in Latin America and Asia, will continue to lead the property recovery into the second quarter of 2010 with sentiment towards capital values particularly strong in Hong Kong, Peru and Brazil. There has also been a material improvement in Russia.
Other key points include:
- New development starts are rising in Brazil, Peru and Chile
- Capital values are still declining in Ireland, Spain, Turkey, Hungary and Greece
- Rental declines are easing in UK, France and Germany
- Australian property market sees positive shift in investment activity
- Rents rose in China for the first time in 18 months
- Investment transaction activity in China grew at half the pace of Q4
