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Weaker economic picture takes its toll on global real estate sentiment while UAE shows degree of stability, reveals RICS survey

United Arab Emirates: Monday, January 30 - 2012 @ 09:07

Despite this, rent expectations remain positive (more respondents anticipate rents rising than falling) in eight of the countries surveyed. Chief amongst these are Canada, Brazil, Russia and China. In each of these markets fresh demand for space continues to outstrip new supply which reflects the relative resilience being displayed by these economies.

In the UAE, occupier demand was judged to have broadly stabilised in the last quarter of 2011 with rental expectations and investment enquiries maintaining an upward trend since 2010.

By way of contrast, the outlook for rents is predictably still quite negative across much of Europe with the noticeable exception of Germany. The prospect of an extended period of minimal growth, if not a retreat back into outright recession, is clearly weighing heavily on the sector in the wake of the ongoing turmoil relating to the sovereign debt crisis. Sentiment in the occupier market has also turned a little more negative in both Singapore and India but that follows strong increases in rents through 2010 and the first half of 2011.

On the investment side, it is the same four countries (Canada, Brazil, Russia and China) where expectations for capital values are strongest. Meanwhile, across much of Europe sentiment is particularly downbeat. Interestingly, the revival in transaction activity in the US is expected to persist despite on-going concerns about the outlook for the economy; indeed, it produced the strongest reading regarding the near term outlook for sales.

Commenting on the survey, Simon Rubinsohn, RICS Chief Economist, said, “It is no surprise that the fourth quarter results are a little bit gloomier given the economic news during the period. However, the data shows that real estate in some parts of the world continues to provide significant opportunities. In particular, the numbers demonstrate that sentiment remains generally upbeat in many of the faster growing economies even if they are themselves also likely to grow a little more slowly in 2012. Moreover, the survey also highlights the difference in the developed world between those countries that largely shunned the sub-prime credit boom such as Canada and Germany and those that participated in it.”

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Monday, January 30- 2012 @ 9:07 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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