Investors are starting to return to the world property market. Is this the start of the revival?
The Royal Institution of Chartered Surveyors recently reported on their latest Global Commercial Property Survey that investment transactions grew in 70% of global markets in the final quarter of 2009. Although there are many factors deemed to have contributed, this has mainly been attributed to the increased confidence in the global outlook.
While developing economies in Latin America and China saw a particular resurgence, London also saw a revival in fortune.
Reported expectations of an increase in rental values and subsequent demand for commercial property, highlighted the confident outlook for emerging economies. In the final quarter, Brazilian surveyors reported a rise in transactions from 29% to 61%. Similarly, Chinese surveyors reported a rise from 47% to 58%.
“The strength of the results contained in the survey for Latin America and Asia are a reflection of the unfolding economic recovery with many of the more developed markets likely to be hampered by the challenges resulting from the ballooning of public sector debt and need of the authorities to gradually exit from emergency monetary conditions,” stated Simon Rubinsohn, the RICS chief economist.
When the financial crisis hit, the value of commercial property suffered with values falling sharply. Yields available on acquisitions are now however increasingly appearing attractive while there are low interest rates.
The weak pound has also boosted the UK market and it is attracting overseas investors to the distressed property prices. A total of 41% of commercial property buyers in the UK for 2009 were from overseas investors. This statistic is only bettered by Germany, who had 58% from overseas investors.
