Is Real Estate Value in Poland About to Decline?

RICS presented the results of a survey concerning global commercial real estate in Q1 2013.

The latest research conducted by RICS, “Global Commercial Property Survey”, indicates positive global trends on the commercial real estate markets. However, the situation is different for  the countries in the Eurozone and East-Central Europe. In these regions, tenant activity is decreasing, whilst the prognoses concerning capital value are negative.

The respondents decided that in these regions rents and capital value will decrease in the nearest future. Despite growing investment demand in countries such as Poland and France, the upcoming months will see the decrease in commercial investment value. What is more, the supply of risked assets is expected to grow in the Eurozone and East-Central Europe.

In Poland, where the capitalisation rate has been fairly stable for the last several quarters, investors' interest concentrated solely on the best commercial real estate. The demand for office space is moderate, whilst the expected high supply and harsh competition between the owners of existing and planned space supply brings about a decline in rents. Because of lower expected revenue from real estate and low interest in the investments on the second-rate markets, the decline in capital value is expected in the upcoming months – as we can see in the responses to the survey. - comments Łukasz Maciak MRICS, Chartered Valuation Survayor.

Despite those tendencies, RICS points out to the more positive aspects, such as growing interest in the commercial real estate in Spain, which influences expected capital value of real estate. A similar trend is visible in the Czech Republic, Ireland and Belgium. The survey shows that the buyers look for good offers in the regions where the demand for risk assets from the real estate sector is growing.

Russia and Germany are ranked the highest, as the demand for new space is growing is these countries – and so does rent expectancy.
Persons surveyed showed positive sentiment towards Asia and North America. They also indicated positive trends in the United Arab Emirates. The results suggest the investment market's advantage over the lease market, caused by constant problems with the lack of financial warranty from the banks in the case of commercial real estate sales.

Rent expectation is especially high in Canada, Russia and Japan, as well as China, Hong Kong, the USA and Germany.

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