The latest Global Commercial Property Survey by the Royal Institute of Chartered Surveyors (UK) is positive on the prospects for growth in many global markets. The report found improvements in many countries and said that an increasing number of property professionals were feeling positive about their respective property markets. It also suggested that the outlook for the second quarter is positive with capital values set to increase and rents expected to rise in more countries as the global property market recovers.
Property markets in emerging economies continue to outperform those in developed countries, with the BRIC economies and the Asian markets of Hong Kong and Singapore performing particularly well. In spite of the cooling measures imposed by the Chinese government, the Hong Kong property market is continuing to boom, with rental and capital values expected to remain high for the next quarter. Countries in emerging Europe are proving to be particularly strong as well, as is France due to a surge in business confidence.
The survey reported that tenant demand had risen in most countries compared to last year, but fallen on the quarter in the UAE, Japan and peripheral Europe. In those locations the net balance of rental expectations remains negative.
The UK property market has seen an increase in tenant demand this quarter, but this is mainly thanks to incentives being offered by landlords. The situation is expected to worsen as public sector cutbacks increase leading to increasing supply. This suggests that the market will not pick up during the second quarter; in fact many agents expect rents and capital values to decline. That is of course, with the exception of London, which is expected to continue outperforming the rest of the country.
The outlook for rents and demand were good for Latin America and Asian countries, with Peru beating Hong Kong and China and Russia and Argentina also scoring highly. The market in Brazil is expected to remain robust, but it could be affected if interest rates increase later on in the year.
Agents expect growth in Russia to continue this year as demand from both tenants and investors remain high. Germany and India are also tipped for growth, with rents expected to rise during the coming quarter. Even the US saw predictions that rental rate growth would turn positive for the first time since 2008.
The chief economist for the RICS, Simon Rubinsohn, expects the divergences between economies to continue, with some trying hard to cool inflation and others struggling to find growth.