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European commercial property loses ground
Sector is losing ground on rest of the world, according to a survey of chartered surveyors.
Commercial property markets in Europe struggled to keep pace with other parts of the world, a Royal Institution of Chartered Surveyors for the fourth quarter of 2011 has revealed.
Rics revealed rental predictions were in negative territory across much of Europe, with the noticeable exception of Germany.
Simon Rubinsohn, chief economist of Rics, said the prospect of an extended period of minimal growth, if not a retreat back into outright recession, was clearly weighing heavily on the sector in the wake of the ongoing turmoil relating to the sovereign debt crisis.
However, he said rental expectations remained positive in eight of the countries surveyed, with respondents in China, Brazil, Russia and Canada among those predicting increases rather than falls in future rental values.
In each of these markets, Mr Rubinsohn said fresh demand for space continued to outstrip new supply, which reflected the relative resilience being displayed by these economies.
On the investment side, he said it was the same four countries where expectations for capital values were strongest.
Meanwhile, across much of Europe, Mr Rubinsohn said sentiment was particularly downbeat.
He did, however, say the revival in transaction activity in the US was expected to persist, despite on-going concerns about the outlook for the economy. Mr Rubinsohn said surveyors in the US reported the strongest reading regarding the outlook for future sales.
He said: “It is no surprise that the fourth quarter results are a little bit gloomier, given the economic news during the period.
“However, real estate in some parts of the world continues to provide significant opportunities. In particular, sentiment remains generally upbeat in many of the faster growing economies even if they are likely to grow a little more slowly in the coming year.
“Moreover, the survey also highlights the difference in the developed world between those countries that largely shunned the sub-prime credit boom such as Canada and Germany and those that participated in it.’’
