Despite the recent economic difficulties, most commercial property markets remain robust, with the largest economies of Germany and France reporting strong performances, according to the latest RICS Global Commercial Property Survey published on Thursday.
Despite the recent economic difficulties, most commercial property markets remain robust, with the largest economies of Germany and France reporting strong performances, according to the latest RICS Global Commercial Property Survey published on Thursday.
Russia, Poland and the Czech Republic also showed encouraging commercial sector results, ranking among the top performers in the world in terms of both occupier and investment demand.
The majority of countries surveyed witnessed positive growth in occupier and investment demand as well as in development starts during the second quarter of 2011. Predictably, the results show that the mood in the countries on the outer fringes of the euro area has deteriorated further in the past three months, as concerns over a Greek default intensify. The survey also reveals that expectations for rental values and capital values remain negative in half of the European countries.
Russia's commercial property market is performing extremely well, with respondents reporting a sharp rise in development starts during Q2 and investment demand that has now been rising for seven consecutive quarters. RICS members also reported increasing levels of occupier and investment demand in Poland, where rental expectations continue to grow reflecting market confidence.
The commercial property market in Germany continues to shine although expectations for the rate of growth in the coming quarter have moderated slightly. Occupier demand remained positive during Q2, as did development starts.
Despite this positive sentiment, poor economic conditions continue to weigh down on the commercial real estate market in several European countries. Greece, the Republic of Ireland, Portugal and Spain to a certain extent, sit at, or just above, the bottom of the rankings for most of the key indicators.
Commenting on the survey, Simon Rubinsohn, RICS Chief Economist, said: 'The recent move by the European Central Bank to raise interest rates will likely further widen the already large gap between the performance of commercial property markets in core and peripheral Europe. While countries in the former group continue to report generally positive numbers, the latter group is struggling with the ongoing sovereign debt crisis and weak economic growth.'
