Global commercial property rents experienced the biggest decline in Q2 for five years with surveyor sentiment remaining depressed, according to Q2 2009 RICS Global Commercial Property Survey.
97% more chartered surveyors in both Ireland and Spain reported a fall than a rise in rents and a further 97% expect rents to continue to fall rather than rise over the next quarter. Surveyors in Singapore and the Ukraine were unanimous that rents have fallen with the net balances in both countries reaching 100%.
However, Emerging Asia stands out as the regional outperformer with a marked slowdown in the pace of rental declines. Tenant demand in China and India rose for the first time since 2008, with 8% more surveyors reported a fall than a rise in capital values in China, up from 49% in the first quarter.
The most improvement was in Hong Kong where the net balance turned positive. 57% more chartered surveyors reported a rise than a fall in capital values up from a negative balance of 81%.
While transaction activity continued to drop in most world markets, a few countries saw an increase in investment bidders per property. The UK reported a positive balance, with 46% more chartered surveyors seeing an increase in bidders than those seeing a decline.
RICS chief economist Simon Rubinsohn says: "The dearth in global finance continues to impede investment activity with transactions in decline across more than 80% of countries surveyed.
"However, higher yields may be starting to attract interest particularly in economies such as the UK and Hong Kong where prices have already corrected significantly and borrowing and saving rates are at historic lows. In emerging markets, those countries tied into Chinese trade relationships appear to be weathering the storm better than most with parts of Latin America and Africa including Mauritius, Nigeria and Ghana holding up relatively well."
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