Worsening economic conditions have now taken a toll on almost every commercial property market in the world, according to a global survey of real estate surveyors…
The past few months have seen a sharp deterioration in performance and demand for real estate in many regions that had previously appeared resilient to the credit crisis, in particular parts of Asia and Eastern Europe.
The slump in commercial property is well established in mature markets such as the UK and US , but a report today from the Royal Institute of Chartered Surveyors shows that there are few property markets in the world that remain unscathed by the economic crisis.
The net balance of movements in global rents turned negative for the first time in the survey's history, led by weakness in the US, Japan , Spain , Ireland and India , while property values also worsened markedly in the third quarter.
The report, which measured sentiment among surveyors about the value and tenant demand for property, singles out the Indian market as being particularly hard hit. The region has attracted many overseas investors hoping to tap into the property needs of a previously booming economy.
Rising interest rates, higher inflation and a lack of liquidity is affecting confidence in the country, says the report, and 45 per cent more surveyors reported a fall in occupier demand compared with six per cent in the last quarter. The balance of surveyors reporting investor purchases plummeted from zero to minus 73.
The biggest slump in capital values has been in Eastern Europe, a marked turnaround considering expectations of growth only three months ago.
Source: The Financial Times