The survey, published today also found that expectations for both rents and capital values on balance continue to improve.
RICS' Global Commercial Property Survey is a quarterly guide to the developing trends in commercial property investment and occupier markets in close to 50 countries around the world. The current edition details market conditions for the fourth quarter of 2010 based on information collected from leading international real estate organisations, local firms and other property professionals.
Key Findings Rental expectations for Q1 2011 are most positive in Latin (as well as Central) America and Asia. The responses from Peru are particularly upbeat but, amongst the major markets, Hong Kong, China, Singapore and Brazil lead the way. Russia also scored well on the likely trend in rents. The contrast to this is provided by Greece, Spain, the Republic of Ireland and Japan where the net balance of respondents continue to foresee further rental declines.
The responses for the investment market are broadly similar, with capital value expectations most favourable in Asia and Latin America amongst the major markets. Meanwhile it is once again peripheral euro area and Japan who are firmly ensconced at the foot of the table.
Interestingly, the resilience of the Chinese and Hong Kong property markets suggests that the impact of the well-publicised measures taken by the Chinese government to try and cool developments in the real estate sector has been limited. In China, both tenant demand and rental expectations posted strongly positive net balance scores, +57 and +67, respectively, while in Hong Kong, rental expectations rose to +88 from +70 last quarter.
Meanwhile, there is increasing evidence to suggest that the US commercial property market also seems to be improving. Capital expectations picked up this quarter, showing a positive net balance of +15. This, in turn, seems to be driving a positive swing in US investor sentiment. Investment transaction activity rose quarter over quarter (from +28 to +36) as did the number of investment bidders per property. Rental expectations, while still in negative territory, were less so than previously.
Commenting on the survey, Simon Rubinsohn, RICS Chief Economist, said: "Sentiment seems to be improving across much of the global commercial property market. Solid growth in Asia, Latin America and parts of Eastern Europe is providing significant support for the real estate sector. Indeed, a key reason for central banks raising interest rates in these parts of the world is to head off concerns over the re-emergence of another asset price bubble. Even so, our suspicion is that these markets will see the strongest gains in capital values over the course of 2011.''
