European commercial property set to grow

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, says the latest RICS Global Commercial Property Survey, published today 17 February, 2011. 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. On the other hand, only 13 countries, out of 24 covered by the survey, recorded a rise in investment activity compared to 17 in Q3, having inevitably impacted capital value expectations.

Investment markets in Poland and Turkey recorded the best results in the region. Across Europe the retail and office sectors improved the most. In the other world regions rental expectations for Q1 2011 are most positive in Latin (as well as Central) America and Asia.

Source: Property Magazine International