Posted by: realtormarkpalace | July 31, 2010

Real estate in emerging economies on the rise; U.S. outlook improves

Real estate in emerging economies on the rise; U.S. outlook improves

NEW YORK – July 29, 2010 – Property markets in the more dynamic economies of South America, Asia and Eastern Europe are outperforming those in the United Kingdom and Eurozone, according to the RICS Global Commercial Property Survey for second quarter 2010.

The survey suggests that real estate performance in the United States has shown a marked improvement while in Latin America the commercial property market continues its bull run.

Respondents in Peru and Brazil were most upbeat, topping all in the Americas for both rental and capital value expectations. Survey respondents in Canada currently view the market as stable.

“The real estate world continues to be split, broadly speaking, between the emerging and developed economies,” said RICS chief economist Simon Rubinsohn. “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.”

Occupier demand is rising in the majority of countries across the globe with the notable exception of the UK and Eurozone 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. Significantly, France is bucking the negative Eurozone trend with more material signs of an upturn in sentiment towards real estate reflecting, in part, the relatively resilient performance from the domestic economy. Property professionals in the United States reported a rise in tenant demand across all three sectors for the first time in three years.

Brazil is leading the way with the net balance of property professionals reporting a rise in occupier demand moving from 70 percent to 85 percent with markets in Peru and China also performing well. By way of contrast, demand in the UK turned negative for the first time in a year with the net balance falling from a positive 14 percent to a negative 4 percent while the net balances in Spain, Germany and Greece are all in negative territory.

Indicators in China 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 toward capital values is particularly strong in France, Peru and Brazil while property professionals are most optimistic on rental increases in Brazil, Hong Kong and Peru.

RICS’ Global Commercial Property Survey is a quarterly guide to the developing trends in the commercial property investment and occupier market. This edition details market conditions for the 2nd quarter of 2010 based on information collected from leading international real estate organizations and local firms.

© 2010 Florida Realtors®

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