August 4, 2008—Transaction volumes and capital values plummeted as the commercial property market suffered under financial liquidity constraints, says the RICS Global Commercial Property Survey, published recently. Tenant demand fell at a faster pace in the developed world in the second quarter, says the survey.
Seventeen percent more Chartered Surveyors reported a fall than a rise in tenant demand across the globe as the effect of the credit crunch deepened. The worst hit areas were North America, Australasia, western Europe and, to a lesser degree developed Asia.
Growth in purchasing activity continued its downward spiral with all regions outside Latin America either stagnating or declining. The weakest investment markets were seen in North America, Australasia and Western Europe. Indeed, of the more than 50 countries surveyed, 7 of the 10 worst performing countries are located in Western Europe with the most negative sentiment towards prices for Q3 expected in the Republic of Ireland and Spain. Outside Western Europe, Hungary, New Zealand and South Africa displayed the most negative sentiment towards future prices with the US positioned only one place above the bottom 10.
RICS’ Global Commercial Property Survey is a quarterly guide to the developing trends in the commercial property investment and occupier market. This edition details market conditions for the second quarter of 2008 based on information collected from leading international real estate organizations and individual local firms.
Survey questionnaires were sent to real estate organizations in June 2008, with responses received up until the July 14, 2008. Respondents were asked to compare conditions over the latest three months with the previous three months. A total of 410 responses were received. Responses have been amalgamated across the three real estate sub-sectors of offices, retail and industrial property at a city level, to form diffusion indices for the commercial market as a whole.
For more information, see the RICS Web site.
