GLOBAL - The pace of decline in global property capital values accelerated in the first quarter of 2009, particularly in Europe where price falls hit both western and emerging economies, according to the Royal Institute of Chartered Surveyors (RICS).

The institute's latest quarterly global property survey showed that France, the Netherlands and the Republic of Ireland saw capital values drop significantly and real estate professionals in all three countries were the most pessimistic about the near-term outlook.

Property agents were also increasingly pessimistic about capital values in many parts of central and eastern Europe, especially in Ukraine, Russia, Poland and Croatia.

Rents are said to be falling in more than 90% of the countries surveyed, with only Brazil, Saudi Arabia and parts of Africa yet to report declines.

Respondents were unanimous that rents are also falling in Singapore and Ukraine, while in Russia 97% of those questioned reported a fall in rents.

Weaker tenant demand has led to faster rises in reported available space the survey says, with rental expectations the weakest in Singapore, Hong Kong and Ireland, while emerging European markets like Hungary, Romania and Ukraine were also markedly "gloomy".

That said, the rapid repricing in markets such as the UK is expected to encourage investor interest, the survey reported.

Across the developed regions leading the market cycle, investment demand and lettings demand fell at a slower pace, prompting expectations that transactional activity will begin to pick up in western Europe and Asia for the first time in over a year.

"The rental downturn is gathering momentum across all global markets, although some countries which have led the correction in pricing appear to have passed the worst point," said Oliver Gilmartin, senior economist at RICS.

"The repricing in developed markets has increased pressure on some emerging locations where, on a relative basis, assets remain expensive.

"Whilst countries in emerging Asia saw some improved sentiment off the back of recent stimulus packages, there was little optimism in eastern Europe which displayed the sharpest declines in occupier activity," he continued.