Tenant Demand Declining Worldwide, but Slowing in the U.S.
Real estate rental expectations deteriorated further, despite some improvement in the economic data and a moderation in the pace of decline in capital values in all world regions, according to a recent Royal Institution of Chartered Surveyors (RICS) Global Commercial Property Survey.
Real estate rental expectations deteriorated further, despite some improvement in the economic data and a moderation in the pace of decline in capital values in all world regions, according to a recent Royal Institution of Chartered Surveyors (RICS) Global Commercial Property Survey.
In the United States, tenant demand is still declining but has slowed somewhat. According to the property professionals surveyed, the release of speculative supply onto the market is likely to continue diminishing.
In the second quarter of 2009 RICS reported the sharpest declines in global commercial property rents in the survey's five year history, with Singapore, Ukraine, Spain and Ireland leading the way.
Sentiment among property professionals in Spain and Ireland remained depressed with 97 percent more of those surveyed in both countries reporting a fall rather than a rise in rents. Property professionals in Singapore and the Ukraine were unanimous that rents have fallen with the net balances in both countries reaching 100 percent.
Notwithstanding continuing attempts by agents to offer more attractive inducements, forward-looking rental sentiment remains pessimistic. In Italy, Spain and Ireland property professionals remain particularly downbeat about the outlook for rents. Ninety-seven percent in both Ireland and Spain expect rents to continue to fall rather than rise during the next quarter while property professionals in Croatia and Singapore are unanimous that rents will fall.
While transaction activity continued to drop in most world markets, a few countries saw an increase in investment bidders per property. The United Kingdom was particularly notable in this regard reporting a positive balance of 46 percent more property professionals seeing an increase in bidders.
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 second quarter of 2009 based on information collected from leading international real estate organisations and local firms.
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