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China continues to lead in Asian real estate
HONG KONG, Nov. 16, 2011 /PRNewswire-Asia/ -- Commercial real estate in mainland China and Hong Kong continued to perform strongly in the third quarter of the year according to the latest RICS Global Property Survey. However other key Asian markets such as Singapore and Malaysia have started to feel the impact of the worsening economic climate with sentiment towards occupier demand and rental expectations turning a little more negative.
In mainland China, lending conditions have become increasingly restrictive to prevent the property markets from overheating. The less accommodating policy environment is helping to stabilise the market across all sectors and has contributed to the problems being faced by some developers. Nevertheless, investment demand and transaction expectations are continuing to rise (with net balances of +36 and +43 respectively). This is contributing to the steady increases in capital value expectations. In Hong Kong, the net balance of investor demand and transaction levels also remain in positive territory with expectations of capital value growth still outpacing global counterparts. By contrast, in Singapore and Malaysia, investor interest has weakened with the net balances for investor demand and transaction levels falling into negative territory.
Commenting on the survey, Chris Brooke, RICS Asia Chairman, says, "During the course of the third quarter of 2011, relatively high levels of activity continued to be seen within the commercial property sector in Asia from both occupiers and investors. Given the relatively strong economic conditions within the region during the period, occupiers within a variety of sectors continued to expand, particularly within countries demonstrating strong economic growth such as China, India and Indonesia.
"There was also a continued focus from investors upon deploying capital in Asia, with high volumes of commercial investment activity in both China and Japan, although this softened in certain markets due to increased constraints associated with the securing of financing associated with investment transactions. The broader global volatility and uncertainty experienced during the third quarter had a limited impact upon commercial property activity in Asia, but is expected to be seen more clearly during the fourth quarter and going into 2012."
While still more robust than most, mainland China's commercial property market lost some momentum this quarter. The pace of tenant demand moderated somewhat, while available space once again moved into positive territory. That said, rising occupier demand still continues to far outstrip rising supply. Looking ahead, expectations for next quarter remain strongly positive, but the pace of expected growth seems to have slowed. Rental expectations eased from +73 to +65, capital value expectations from +71 to +56 and investment demand expectations from +42 to +36, quarter over quarter.
The Global Market Condition
The global real estate market has begun to feel the effects of the softer macro economic environment, finds the Q3 2011 RICS Global Commercial Property Survey. According to the report, more countries indicated fewer investment enquiries and development starts this quarter than in Q2 2011, while available space rose considerably across the countries surveyed. In addition, negative sentiment colours the global outlook for Q4 2011 with almost two-thirds of countries reporting negative rental and capital value expectations and nearly two-fifths reporting an expected decline in investment demand.
European debt crisis is not resolved till today
The commercial real estate market in Germany continues to perform relatively well despite the growing woes of its near neighbours. Indicators across the board remained positive for Q3. Expectations of rental and capital growth both posted net balance scores of +19. In contrast, the picture in the UK commercial property market remains a little more downbeat. Occupier demand fell back into negative territory as on the back of the slowing economy while the pace of available space picked up slightly.
Uncertainty hanging over the American economy
The tentative US recovery of the last two quarters seems to have stalled in Q3 2011, which may in part the increasing uncertainty hanging over the American economy. Occupier demand continues to rise, but at a slower pace than seen previously. Development starts this quarter became more negative while investment enquiries remained largely flat. One piece of good news for the real estate market in the US; investment demand is expected to remain positive.
Notes to Editors:
The RICS Global Commercial Property Survey is a quarterly guide to the developing trends in commercial property investment and occupier markets around the world. Providing a snapshot of sentiment, the current edition details market conditions for the third quarter of 2011 based on information collected from leading international real estate organisations, local firms and other property professionals. The complete survey is available at www.rics.org/economics
Net Balances: Net balance percents, or scores, are calculated by subtracting the numbers of respondents reporting 'down' from the number who reported 'up'.
To download the full report, please visit http://www.ricsasia.org/newsDetail.php?id=451.
About RICS & RICS Asia
RICS is the world's leading qualification when it comes to professional standards in land, property and construction.
In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.
RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity - providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.
The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific 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
Mr. Andy Hung
Tel: +852-2372-0090
Fax: +852-2372-0490
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Email: andy@creativegp.com