Investors and leaseholders in Europe are not very optimistic, when commercial property’s market is concerned. According to a study conducted by RICS, Global Commercial Property Survey, only Germany and Belgium stand out from the general trend. Meanwhile, Polish experts were less optimistic than predicted.
Report shows a significant difference between Europe and other economies. Improvement can be seen in United Arab Emirates and Asia, while European economy is still declining. Unfortunately, predictions are also pessimistic.
Germans stand out inside the European Union. Poland however, presents a restrainedly low level of optimism in terms of state of its economy. A growing interest in commercial properties in countries like Spain, Greece or Poland, does not translate into expected asset value. The situation is different in Belgium, Austria, Switzerland and Ireland.
In Poland the interest of investors focused mainly on the best commercial properties sector and was higher than in analogous period of the previous year. Supply for office space is moderate and limited mainly to banking sector leaseholders which, after last fusions and acquisitions, analyzes long-term rent options – says Łukasz Marciak MRICS, Chartered Valuation Surveyor, Capital Markets Director at DTZ Poland. Existing competition and consolidations on rent market result in aggravated competition between owners of existing and planned investments. Strategic leaseholders may count on very attractive rent rates, which in turn translate into an increased pressure for decreases in rent also for minor leaseholders. The appetite for investments in a commercial properties sector increases especially for assets of a strong, stable position. A pinch of positive sentiment can be found in the respondents’ answers – Marciak adds.
Positive in other regions of the world
Thanks to a high supply and strong policy of Japanese Prime Minister Shinzo Abe, Japan is the leader in investments inside Asia. Although the Chinese market is growing slowly, its results are also quite satisfying.
The wave of optimism has been felt also in the US. Signs of investors’ interest in new projects and increased leaseholders’ demand begin to show.
The situation is getting worse in Brazil. The mood indexes have decreased primarily among leaseholders. It’s connected with information concerning negative state of economy.
Stabilization of property sector can be seen in India. It’s caused by certain cautiousness, which is a result of struggle of central bank with a decreasing economy and fluctuations currency exchange rates.
Renting index remains negative in Australia. Noted economy indexes are also pessimistic.
The results of the study show, that the bad economic situation in most of Europe still influences a lack of demand on commercial spaces. Taking this into account, the fact that predictions concerning rents outside key centers remain bad is not surprising. In the meantime, German market still is in a better situation than the rest of the continent, which is influenced by rather optimistic picture in smaller scale – says Simon Rubinsohn, main economist in RICS.