Central and Eastern Europe was the worst performing emerging market region in the first quarter of 2009, with the pace of decline in capital values continuing to accelerate, according to the RICS Global Property Survey. All respondents in Ukraine, Russia, Poland and Croatia reported a fall rather than a rise in capital values with confidence towards the outlook for lettings activity falling back further across the region.
Central and Eastern Europe was the worst performing emerging market region in the first quarter of 2009, with the pace of decline in capital values continuing to accelerate, according to the RICS Global Property Survey. All respondents in Ukraine, Russia, Poland and Croatia reported a fall rather than a rise in capital values with confidence towards the outlook for lettings activity falling back further across the region.
Weaker tenant demand has led to faster rises in reported available space which has compounded the gloom towards the rental outlook. Globally, rental expectations are weakest in Singapore, Hong Kong and Ireland with sentiment in countries in emerging Europe also gloomy - particularly Hungary, Romania and Ukraine. Available space has risen across every region, with incentive packages rising as a result.
Despite the rental gloom the rapid re-pricing in some markets may be encouraging investor interest, RICS said. Across the developed regions leading the property cycle, investment demand and lettings demand fell at a slower pace. Purchasing activity is expected to rise across Western Europe and Asia for the first time in over a year. Earlier CBRE reported weighted prime capital values for CEE offices fell 41% year-on-year in Q1 2009.
