Magazine article Mortgage Banking

Expectations Increase for U.S., Emerging-Market Properties, RICS Says

Magazine article Mortgage Banking

Expectations Increase for U.S., Emerging-Market Properties, RICS Says

Article excerpt

The United States showed "marked improvement" in commercial real estate, based on the London-based Royal Institute of Chartered Surveyors' (RICS') second-quarter Global Commercial Property Survey.

Property professionals reported a rise in tenant demand across all three sectors--office, retail and industrial, according to RICS. However, property markets in emerging markets of South America, Asia and Eastern Europe outperformed properties in the United Kingdom and Eurozone, the survey said.

"The real estate world continues to be split, broadly speaking, between the emerging and developed economies," said Simon Rubinsohn, chief economist at RICS. "Strong growth in many of the former, including the likes of Brazil, Hong Kong and India, is continuing to boost demand for new space from occupiers as well as encouraging investment activity. Meanwhile, in many of the latter, fiscal retrenchment allied to bank delever-aging continues to place significant obstacles in the way of a meaningful recovery in the commercial property market."

Rubinsohn said sentiment toward capital values is particularly strong in France, Peru and Brazil for the third quarter, while property professionals are most optimistic on rental increases in Brazil, Hong Kong and Peru. Respondents in Peru and Brazil were most upbeat, he said, topping all in the Americas for rental and capital value expectations, while survey respondents in Canada viewed the market as stable.

Brazil's net balance of property professionals reported a rise in occupier demand, moving from 70 percent to 85 percent, with markets in Peru and China also performing well in the survey. …

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