As occupier demand for commercial property gained momentum across most European markets during the last quarter of 2010, rents are expected to improve in the coming months, according to the latest RICS Global Commercial Property Survey.
As occupier demand for commercial property gained momentum across most European markets during the last quarter of 2010, rents are expected to improve in the coming months, according to the latest RICS Global Commercial Property Survey.
Comments from respondents indicate that the recovery of the occupier market is broadening in the region, with a positive effect on rental expectations and progressively reducing the problem of property oversupply in most markets. Russia and Ukraine experienced the strongest occupier market growth, followed closely by Germany, influenced by a strong economic climate, falling unemployment and rising consumer confidence. The situation is also improving in Central & Eastern European markets such as Czech Republic and Poland.
However, market conditions appear worse in European 'peripheral economies' such as Greece, Spain, Ireland and Portugal, with tenant demand and rental expectations falling sharply in Q4 2010, as fiscal austerity stifles growth, sovereign debt concerns and high unemployment continue to plague these countries.
'Sentiment seems to be improving across much of the global commercial property market,' said Simon Rubinsohn, RICS Chief Economist. 'Solid growth in Asia, Latin America and parts of Eastern Europe is providing significant support for the real estate sector. Indeed, a key reason for central banks raising interest rates in these parts of the world is to head off concerns over the re-emergence of another asset price bubble. Even so, our suspicion is that these markets will see the strongest gains in capital values over the course of 2011.'
