Real Estate Investor Magazine South Africa June 2014

COMMERCIAL Across the Euro area, a degree of divergence appears to be emerging as the recovery in commercial property gains traction in some member states, while the progress in others stalls. 12 month view suggests that rents will rise as the year progresses. Significantly, in Ireland, both the three and twelve month rental expectations indicators are firmly entrenched in positive territory. Sentiment indices remain particularly downbeat throughout France and the Netherlands, despite both of these nations formerly exiting recession during the latter part of 2013. By way of contrast, a significant improvement is now visible in Ireland, Spain and Portugal. In fact, investment transaction expectations are now higher in these three nations than in any other countries included in the survey. Alongside this, the performance of the UK and Germany remains particularly strong, in keeping with recent results and macro data. Going forward, this is anticipated to translate into a sharp rise in transactions. Moreover, the brighter outlook is not simply limited to the investment side. With unemployment falling (albeit from very elevated levels), occupier demand is rising. Although for Spain and Portugal rents are expected to remain broadly stable in the near term, respondents’ In China, headline activity in the occupier market appears to have turned relatively flat, while progress on the investment side is still seeing a modest uptick. The Hong Kong data shows a continuation of the downward trend established during the early part of last year, as occupier demand slips further and investment enquiries decline, resulting in negative OSI and ISI values. The results for Russia highlight a sharp decline across both the occupier and investment markets, suggesting conf idence has been undermined by geopolitical tensions and the ongoing slowdown in economic activity, with the risk of recession now looming. Likewise, the Brazilian figures continue to deteriorate, with the ISI turning negative while the OSI dropped backed further from last quarter’s already negative reading. T he t welve mont h ind icators sug gest l it t le improvement over the year ahead, with rents and capital values expected to decline as moderating growth and higher interest rates take their toll on the real estate market. R ICS Ch ief E conom ist Si mon Rubi nsoh n commented: “The Q1 RICS Global Commercial Report Monitor highlights the more widespread sense of optimism in the G7 occupier and investment markets versus the BRICs. At the country level, the best performing markets during Q1 were the UAE and Japan, while the weakest were Brazil and Russia. Significantly, some of the hardest hit countries by the global financial crisis, the Republic of Ireland and Spain, are now seeing a recovery in sentiment.” RICS chief economist Simon Rubinsohn www.reimag.co.za RESOURCES RICS June 2014 SA Real Estate Investor 49

Real Estate Investor Magazine South Africa June 2014 | Page 51