by jbs111009 c3 — November 18, 2009—The latest RICS (Royal Institution of Chartered Surveyors) Global Commercial Property Survey, published October 29, 2009, is noticeably more upbeat than the second quarter report in terms of both the lettings environment and investment activity. Confidence in the outlook for tenant demand over the next three months is either less negative or more positive than was previously the case in every region of the world, says RICS.
This better tone has, significantly, also begun to filter through into rental expectations. Latin American and Asian countries have the most favorable readings when it comes to the outlook for rents, with Hong Kong enjoying a particularly big swing in sentiment. In the second quarter of the year, a net balance of 67 percent of respondents from Hong Kong expected rents to fall further; by contrast in the latest survey, a net balance of 16 percent of respondents suggest rents are likely to rise over the next three months
Peru, Columbia, and Brazil also reported positive net balances on rental expectations while South Korea, China, Thailand, and India were only moderately negative. Australia, U.A.E., and the U.K. also saw rental expectations become less negative over the quarter but the weak results from the U.S. and Japan were not far from the lows touched in the second quarter report. Interestingly, a number of European countries including Ireland, France, and Spain have the worst readings on the rental outlook, notes RICS.
The mood among real estate investors also appears to have perked up, according to the survey, with capital values expected to increase in a number of countries including Brazil, Hong Kong, South Korea, China, and India. This more positive mood has also been reflected in activity indicators with number of investment bidders per property picking up sharply not just in Asia and Latin America but also in a number of European countries. This is consistent with the latest data from Real Capital Analytics (see page 2 of the RICS survey), which shows either a steadying or a modest increase in transaction levels around the globe, explains RICS.
Sentiment towards capital values in the U.S. is, however, still very negative, with 53% more surveyors expecting further declines (rather than increases) in the run-up to Christmas. In the U.K., the net balance on capital values expectations is still in negative territory, although only marginally so, and there has been a noticeable increase in transaction activity.
