Most commercial property markets around the world remain robust, in spite of the recent economic difficulties. In Europe, Germany and France have reported strong performances with Russia, Poland and the Czech Republic also showing encouraging commercial sector results, says the latest RICS Global Commercial Property Survey, published yesterday (July 28, 2011).
Globally, China and Hong Kong continue to be the star performers in both occupier and investment demand. More significantly, they have been joined near the top of global rankings by Russia, Poland and the Czech Republic.
Russia's commercial property market is performing extremely well, with respondents reporting a sharp rise in development starts during the second quarter and continuously growing investment demand that has now been rising for seven consecutive quarters. RICS members also reported increasing levels of occupier and investment demand in Poland, where rental expectations continue to grow reflecting market confidence.
The commercial property market in Germany continues to shine although expectations for the rate of growth in the coming quarter have moderated slightly. Occupier demand remained positive during the second quarter of 2011, as did development starts. Investment demand also maintained its positive trend, but a little less so as the net balance score fell from +60 to +36.
Despite this positive sentiment, poor economic conditions continue to weigh down on the commercial real estate market in several European countries. In contrast to France, Germany and Russia, Greece, the Republic of Ireland, Portugal and Spain to a certain extent, sit at, or just above, the bottom of the rankings for most of the key indicators.
Commenting on the survey, Simon Rubinsohn, RICS Chief Economist, said: "The recent move by the European Central Bank to raise interest rates will likely further widen the already large gap between the performance of commercial property markets in core and peripheral Europe.
"While countries in the former group continue to report generally positive numbers Germany being a particularly bright spot the latter group is struggling with the ongoing sovereign debt crisis and weak economic growth. Indeed, countries such as Greece, Portugal, and the Republic of Ireland all have to deal with heavily troubled commercial real estate markets.
"Over the course of the year, we see little reason for the gap between these two blocs to narrow."
Other key findings:
According to the survey, Russia saw a sharp rise in dev