Commercial real estate
China, Hong Kong take the lead in commercial real estate Investors continue to crowd the Chinese and Hong Kong markets with investment transactions and capital value expectations increasing at a rapid rate.
The Royal Institution of Chartered Surveyors (RICS) have released its Global Commercial Property Survey Q3 2011, which shows strong economic growth in China, India and Indonesia.
The report says sentiment is less upbeat for Q4, across all indicators, and continues to be most negative in peripheral Europe.
The Asian component of the survey highlights three points:
Investors continue to crowd the Chinese and Hong Kong markets with investment transactions and capital value expectations increasing at a rapid rate.
Occupier markets in China are still amongst the strongest in the world with Hong Kong also performing well.
In Q3, Malaysia and Singapore have seemed comparatively downbeat with investor interest flagging and rental values expected to fall.
According to the survey, sentiment towards commercial real estate in China remained resilient in the third quarter of the year according to the most recent RICS Global Property Survey, despite reports of difficulties being faced by some developers. Hong Kong has also held up relatively well. However investment and occupier demand in other key Asian markets was rather softer than in Q2. Investment transactions in China were once again near the top of the global comparison table, suggesting that they continue to increase at a faster rate than elsewhere in the world. However, expected transactions in Singapore and Malaysia were considerably more downbeat.
In China, lending conditions have become increasingly restrictive to prevent the property markets overheating. Nevertheless, investment demand and transaction expectations are continuing to rise (with net balances of + 36 and +43 respectively). This is contributing to the steady increases in capital value expectations. In Hong Kong, the net balance of investor demand and transaction levels remain in positive territory with expectations of capital value growth still outpacing global counterparts. By contrast, in Singapore and Malaysia, investor interest has slipped dramatically with the net balances for investor demand and transaction levels falling into negative territory.