Although a few countries - most notably Canada, Thailand and China - had a strong second quarter of the year, there was a general weakening in sentiment across the majority of the commercial real estate markets surveyed by the Royal Institution of Chartered Surveyors (Rics). The organisation pointed to the broadly poor performance among the European nations it examined, highlighting Germany as one of the few locations to record largely positive results. It is also the only country in Europe where capital values are expected to grow during the third quarter of the year.
However, there are some nations in the continent that are predicted to attract a greater level of investor interest than Germany going forward, most notably Poland and the Scandinavian countries. Japan, Canada and the US also remain targets for commercial property investment, with the firm noting the real estate sector in North America "has maintained its more positive mood in both occupier and investor markets despite the global economic slowdown". The US and Canada were also named as two locations where demand for distressed property assets is expected to significantly outweigh supply.
Last month, Jones Lang LaSalle highlighted several US destinations that are proving popular among overseas investors, although the firm acknowledged London remains the most sought-after location in the world in terms of real estate investment. In addition to the perennial favourites of New York, San Francisco and Washington DC, the markets of Miami, Minneapolis and Phoenix have all become more desirable to foreign buyers. Vice-president of Americas research at the firm Josh Gelormini commented: "The US is also benefiting from a safe haven strategy, as other global markets appear on shakier ground, particularly given the ongoing eurozone crisis."
The Rics survey also pointed out the increasing weakness of the eurozone, noting the poor performance of the region's peripheral markets "has now infiltrated the core", as sentiment in France and Italy became more downbeat. An increase in the level of distressed assets in both these markets is expected in the third quarter of the year, with Greece, Ireland and the Netherlands also anticipating more foreclosed properties will be up for sale over the coming three months.
- Monday 06 August 2012