RICS Global Commercial Property Monitor Q3 2017

Capital value expectations remain most elevated in Europe

„The headline Occupier Sentiment Index* rose or turned less negative in 22 of the 32 national markets tracked, relative to the average readings over the previous two quarters (chart 1). On this measure, occupier market momentum remains firmest in Europe and, in particular, across CEE markets.

Indeed, Hungary, Czech Republic and Bulgaria (accompanied by Spain and Portugal) recorded the strongest five OSI readings during Q3. This significant rate of improvement is in keeping with robust economic growth across these nations, with each posting an annual rate of GDP growth around, or in excess of, 3%. Smartly rising economic output is driving occupier demand higher and supporting elevated rental
growth expectations in each instance. In further evidence of an increasingly widespread upswing in Europe, sentiment has now turned comfortably positive in Greece, where the revival in occupier demand has accelerated over the past two quarters, pushing near term rent expectations positive in all sectors.

With respect to the Investment Sentiment Index (chart 2), the top twelve national readings globally were all registered in Europe. Germany moved to the top of the pile in Q3, with Berlin and Frankfurt both seeing a surge in investment enquiries, while Munich also saw a strong (albeit more modest in comparison) rise in investor demand. Although a majority of respondents in Germany sense conditions are likely close to peaking in the current cycle, strong capital value growth is still anticipated across each of these cities over the next twelve months. Similarly, strong investment demand growth is outstripping that of supply (in net balance terms), producing firmly positive capital value expectations in Budapest, Dublin, Lisbon, Bangalore and Sofia.“

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Quelle: www.rics.org/economics