GLOBAL - While occupier demand is rising in the majority of countries across the globe, austerity measures to reduce fiscal deficits are causing a drag on euro-zone and UK real estate markets, according to the latest global report from the Royal Institute of Chartered Surveyors (RICS).
The latest RICS Global Commercial Property Survey shows Brazil as having the highest net balance of surveyors reporting a rise in occupier demand - moving from 70% to 85% - while markets in Peru and China have also performed well.
However, tough measures to reduce deficits in the UK and euro-zone countries appears to be having a more pronounced impact on businesses' appetite to take up new space, according to the second-quarter report.
For example, demand in the UK turned negative for the first time in a year, with a net balance falling from a positive 14% to a negative -4%.
Tenant sentiment was still negative in Spain, Germany and Greece, while the French commercial property market was one of the best performers, particularly in the investment arena.
RICS said the resilience of the French market reflected the strength of its domestic economy.
In eastern Europe, tenant demand and rental expectations in Poland turned positive for the first time since 2008, while in Russia surveyors expect lettings activity and rents to grow in the coming months.
Meanwhile, surveyors in the US reported a rise in tenant demand across all three sectors for the first time in three years.
And indicators in China still remained strong despite measures introduced by the government to address the property boom.
Looking forward into the third quarter, surveyors expected rental increases in Brazil, Hong Kong and Peru, as well as in some eastern European markets such as Russia, Ukraine and Poland.
Simon Rubinsohn, chief economist at RICS, said: "The real estate world continues to be split broadly speaking between the emerging and developed economies.
"Strong growth in many of the former, including the likes of Brazil, Hong Kong and India, is continuing to boost demand for new space from occupiers, as well as encouraging investment activity.
"Meanwhile, in many of the latter, fiscal retrenchment allied to bank deleveraging continues to place significant obstacles in the way of a meaningful recovery in the commercial property market."
