RICS Global Commercial Property Survey Q4 2010
HONG KONG, Feb. 15, 2011 /PRNewswire-Asia/ -- Rental and capital value expectations continue increase in key Asian markets according to the Q4 RICS Global Commercial Property Survey. Indeed, property professionals indicated that mainland China, Hong Kong and Singapore were three of the best performing countries in the fourth quarter survey.
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, mainland 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 continues to foresee further rental declines.
Interestingly, the resilience of the mainland 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 mainland 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.
Nigel Smith, Chairman of Commercial Property Professional Group Committee of RICS Hong Kong commented,
"Hong Kong government has become more concerned about combating asset inflations and speculation in the residential sector, the current upward cycle is being led by solid end user demand. In the year ahead, capital values are expected to remain firm on the back of low interest rates, rising inflationary expectations, as well as forecast positive GDP growth of 5% to 6% in 2011."
Meanwhile, the commercial property in Singapore has continued to perform firmly even though the expectation for rental growth has failed to secure the upward trend. In general, the outlook for capital values in Singapore is upbeat, with the net balance of respondents reporting an increase at a healthy +79, while the investment demand remained steadily at +78.
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.
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."
Other Regional Highlights
Brazil
Although fiscal retrenchment may result in a modest slowdown in Brazil's GDP in 2011, agents report both firm rental expectations and a positive outlook for capital values. Tenant demand remains strong while the need to rely on inducements to let space has fallen sharply compared with the previous quarter. Indeed, the availability of property to let has dropped quite noticeably in recent periods. However, the real estate sector will have to cope with further interest rate increase over the course of the year.
Germany
A strong economic climate reflected in rising levels of consumer confidence falling unemployment and a buoyant export sector helped push rental expectations into positive territory in Q4 2010 - the first time since Q3 2008. Tenant demand also increased substantially from +29 to +42 while expected capital values rose sharply from +19 to +45.
India
Despite the prospect of further interest rates hikes during the first half of 2011, India's growth profile, helped by a strong manufacturing sector, remains sound. Agents report tenant demand is continuing to increase and that this is being reflected in a rising trend in rents even if the net balance reading on rental expectations slipped back a little in the latest survey. Meanwhile, sentiment in the investment market appears to be stabilising after strong price gains in previous quarters.
Russia
Falling unemployment, strong business confidence and expectations for solid growth in 2011, helped to drive a strong set of results for Russia's commercial property market in Q4 2010. Rental expectations increased dramatically from net a balance score of +38 to +64. Tenant demand also increased.
Spain/Portugal
As fiscal austerity stifles growth, sovereign debt concerns and high unemployment continue to plague these countries. As a result, the commercial property story remains gloomy. In both countries, tenant demand and rental expectations continued to fall sharply in Q4 2010 while capital value expectations remain negative.
Notes to Editors:
Net Balances: Net balance percents are calculated by subtracting the numbers of respondents reporting 'down' from the number who reported 'up'.
Central America: Countries included in this group are Panama, Nicaragua, Honduras and Costa Rica.
About the Survey:
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.
Respondents were asked to compare conditions in Q3 2010 to conditions in Q4 2010. Responses for this survey were collected until 4 January 2011 and amalgamated, at a country level, across the three real estate sub-sectors of offices, retail and industrial property to form diffusion indices for the commercial market as a whole.
If you would like to download the Survey, please click at the link below:
http://www.ricsasia.org/newsDetail.php?id=319
About RICS & RICS Asia
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 150,000 members globally and represents, regulates and promotes the work of property professionals throughout 146 countries.
The RICS Asia supports a network of over 11,000 individual professionals across the Asia region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members. The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.ricsasia.org.
Media enquiry, please contact:
RICS Asia Public Relations Representative
Ms Belinda Chan / Ms Ava Lau
Tel: +852-2372-0090
Fax: +852-2372-0490
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Email: belinda@creativegp.com / ava@creativegp.com
