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RICS Global Commercial Property Survey RICS Economics Q1 2009

www.rics.org

Global rental declines to gather pace • • • •

Price falls accelerate in most emerging markets Rental downturn expected to gather pace Emerging Europe sees weakest occupier activity Upward yield shift gains speed in Japan and US.

Change in rental expectations

Balance of respondents,% 2008 2nd Qtr

100

2008 3rd Qtr.

rents expected to rise

2008 4th Qtr.

2009 1st Qtr.

75 50

0 -25 -50 -75

Confidence towards the rental outlook has been revised down in the latest survey. Sentiment is bleakest across Developed Asia and Emerging Europe. As such, agents are offering greater incentive packages to secure a letting across all regions. Hong Kong , Singapore, Ukraine, Russia and Hungary are among the countries expected to see the biggest rental declines in the quarter to June. The pricing outlook broadly mirrors the rental trends with only Brazil and parts of Africa expected to avert falling prices. Across all developed regions both lettings and investment demand fell at a less pronounced pace although the pricing environment was little improved. The pace of price falls accelerated in North America and Emerging Europe although the sharpest reported declines were in Developed Asia for the second consecutive quarter.

RICS Americas T +1 212 847 7400 ricsamericas@rics.org

RICS Asia Pacific T +852 2537 7117 ricsasiapacific@rics.org

RICS Oceania T +61 ( 2 ) 92162333 info@rics.org.au

RICS Middle East & Africa T +971 ( 4 ) 375 3074 sluthria@rics.org

le idd

Am ti n

M

La

Ea

As d pe & a ri c Af

In Western Europe, Germany remains the outperforming market with expectations towards property values less pessimistic than elsewhere. Sentiment towards rents is worst in the Republic of Ireland , Spain, France and the UK. The outlook towards prices for the second quarter is most negative in the Netherlands, France and Ireland. The Japanese and US real estate markets continue to deteriorate with virtually all respondents to the survey reporting falling capital values. Globally, the upward shift in yields has moderated across most regions although it increased in pace in the US and Japan. Expectations are that yields will be relatively more stable in Australasia , Latin America, Africa and the Middle East in the second quarter.

56 58 H2 2005 55 57 H1 2006 58 55 H2 2006 41 39 H1 2007 16 9 H2 2007 39 14 Q1 2008 Q2 2008 -37 -17 Q3 2008 -56 -39 Q4 2008 -78 -72 Q1 2009 -56 -51 ** Balance = Proport ion of surveyors report ing a rise in prices m inus t hose report ing a f all (if 30% report ed a rise and 5% report ed a f all, t he unadjust ed balance w ill be 25%) Total number of survey contributors =

RICS Europe T+32 ( 2 ) 733 1019 ricseurope@rics.org

rents expected to fall

The Middle East saw activity declines accelerate further with tenant demand and rental expectations falling at a faster pace. Available space is rising sharply in the UAE with the office sector seeing the biggest pick up in reported availability.

Gl obalcom m er ci alpr operty I nvestm ent Tenant Rent s dem and dem and ---------Net Balance - Not Seasonally Adjust ed----------

RICS UK ( press office ) T +44 ( 0 ) 20 7695 1682 sthornton@rics.org

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ia

ic a lo ve

No

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ng gi er Em

De

Eu

Am

ro

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pe

ia As gi er

Em

rn te es W

Rents are falling across more than 90% of the countries surveyed with only Brazil, Saudi Arabia and parts of Africa, yet to report declines. Indeed , available space is rising across every global region dampening rental expectations of real estate professionals.

ng

Eu

ra

ro

la

pe

si a

-100

Au

Prices continued to decline across the developed economies although at a lesser pace with only North America seeing sharper falls. Tenant demand fell across all global regions however, the magnitude of the fall in aggregate has moderated.

25

st

The latest global commercial property survey from RICS shows that the pace of decline in capital values accelerated during the first quarter driven by steeper falls in prices across most emerging markets.

Yields

44 48 56 58 46 14

49 40 34 23 13 28

2 -12 -50 -66

32 43 60 63

361

RICS HQ 12 Great George Street Parliament Square London SW1P 3AD T +44 ( 0 ) 20 7334 3774 F +44 ( 0 ) 20 7334 3795 economics@rics.org.uk


RICS Global Commercial Property Survey RICS Economics Q1 2009

www.rics.org

Real Capital Analytics guest article: Balance of property trading tips homeward Global capital has withered with extraordinary consistency around the world, vanishing almost entirely from the Americas and Asia Pacific and retaining a slim presence in EMEA. By contrast, investment capital from local sources has become ever more important and now comprises by far the largest single investment source in all three global zones, although still fading in volume. Cross-border investment, whether global or continental, was buttressed by the decoupling theory of diversification. This held that emerging economies had become strong enough to stand on their own in a downturn among developed nations. But the drastic global reversal of the past two quarters has effectively neutered that argument. Instead, the conquistador investors who had roamed far afield searching for higher returns have begun seeking investments in their own countries. The lure of home? Distress, looming globally, holds potential for low entry prices and high returns. In 2008, global cross-border investment was $82b, off $107b and 57% from 2007. Continental investment stood at $80b, down 60% from $201b the previous year.

Through mid-2008, global and continental investors played a more significant role in EMEA than in any other zone, buoyed especially by investment from the US—the leading global exporter of capital. The drought of global investment that set in last fall could hit European property markets particularly hard. Even continental investment in EMEA, which had been fed by single-currency Western Europe and relatively high cap rates in Eastern Europe, will show a greater proportional loss as investors increasingly take a domestic focus.

RICS represents 140,000 members worldwide. These professionals provide expert advice on land, property, construction and the associated environmental issues. An independent, not-for-profit organisation, RICS acts in the public interest, upholding standards of competence and integrity among its members and providing impartial, authoritative advice on issues affecting business and society.

Net investment from global capital has decreased most significantly in Asia Pacific, falling from $52.6b in 2007 to $23.2b last year and dropping off precipitously last spring. Local investors, although cutting back acquisition volume, will continue to grow their profile in AsiaPac: their investment activity grew from 55% in 2008 to 72% for all deals in q1’09. The capital markets in this still emerging zone, despite huge strides in recent years, remain—for now—less evolved than those in the Americas and EMEA.

Conversely, local investment capital will play a stronger role in the Americas, where US community and regional banks have been less damaged by the global financial crisis. Investment capital for export will continue shrinking in the US, benefiting local and national property markets. Investors in other major capital exporting nations will also be in a better position to take advantage of investment opportunities at home than net importers of capital. Especially exposed are the BRIC countries as foreign investment capital withdraws. One anomaly: the UK. With real estate values there already battered and the pound weakening, the country may actually be looking attractive, particularly to European investors who can arbitrage the currency and take advantage of still correcting prices.

This article has been written Real Capital Analytics and represents the views of RCA only. Real Capital Analytics is a global research firm based in New York City. The firm's proprietary research is focused exclusively on the investment market for commercial real estate.

The RICS Global property guide is a quarterly publication which aggregates the views of commercial property professionals including RICS members, 2 researchers, fund managers, agents across the world. To participate in this survey four times a year please email globalproperty@rics.org to register your email address.


RICS Global Commercial Property Survey Country statistics - Expectations for Q2 2009 Confidence towards rents in Q2 ranked by net balance scores -100

-80

-60

-40

-20

0

So uth A frica B razil Cro atia Thailand Saudi A rabia Switzerland P hillippines Czech Republic A rgentina Luxembo urg Co lo mbia Italy B ulgaria Vietnam So uth Ko rea China Turkey Germany P o rtugal The Netherlands Scandinavia M alaysia P o land UK Canada B elgium France New Zealand Japan Spain India A ustralia Russia US UA E Ro mania Ukraine Hungary Republic o f Ireland Ho ng Ko ng Singapo re

3

20

40

60

80

100


RICS Global Commercial Property Survey Country statistics - Expectations for Q2 2009 Confidence towards capital values in Q2 ranked by net balance scores -100

-80

-60

-40

-20

0

B razil A rgentina Germany B ulgaria Vietnam So uth A frica China Turkey Luxembo urg Co lo mbia Saudi A rabia Spain India Czech Republic UK Switzerland P hillippines Thailand US New Zealand M alaysia P o land UA E Italy Ro mania P o rtugal B elgium So uth Ko rea Ukraine A ustralia Ho ng Ko ng Canada Republic o f Ireland Scandinavia Hungary Russia Japan France The Netherlands Singapo re Cro atia

4

20

40

60

80

100


RICS Global Commercial Property Survey Regional statistics— Expectations for Q2 2009 Expected Tenant Demand

-100

-80

-60

-40

-20

0

20

Expected Yields

40

60

80

-100

100

Australasia

Australasia

Western Europe

Western Europe

Emerging Asia

Emerging Asia

For Q3 For Q4 For Q1 For Q2

Emerging Europe

North America

Africa & Middle East

Africa & Middle East

Latin America

Latin America

-80

-60

-40

-20

0

20

40

60

80

100

-100

Australasia

Western Europe

Western Europe

Emerging Asia

Emerging Asia

North America

-20

0

20

40

60

80

100

For Q3 For Q4 For Q1 For Q2

Expected Capital Values

Australasia

Emerging Europe

-40

North America

Developed Asia

-100

-60

Emerging Europe

Developed Asia

Expected Investment Demand

-80

Emerging Europe

For Q3 For Q4 For Q1 For Q2

North America

Developed Asia

Developed Asia

Africa & Middle East

Africa & Middle East

Latin America

Latin America

5

-80

-60

-40

-20

0

20

40

60

80

100

For Q3 For Q4 For Q1 For Q2


Lettings market activity Tenant demand How has tenant demand changed in the last 3 months compared to the previous 3 months in terms of quantity of space leased and sold to occupiers?

Change in tenant demand

Balance of respondents,% 2008 2nd Qtr

100

2008 3rd Qtr.

tenant demand rising

2008 4th Qtr.

2009 1st Qtr.

75 50

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

Am La tin

es te rn

W

* Balance = Proportion of surveyors reporting a rise in prices minus those

Ea st

-40

id dl e

-37

Latin America

tenant demand falling

M

Africa & Middle East

&

-59

As ia

-100

Developed Asia

Af ri c a

-75

-66

er ic a

-72

North America

ev el op ed

Emerging Europe

D

-59

Am

-50

Emerging Asia

No r th

-61

Eu ro pe

-62

Western Europe

Au st ra la sia

Australasia

As ia

0 -25

er gi ng

Balance*

25

Em

or fall in occupier demand over the last 3 months

er gi ng

Region

Em

Proportion of surveyors reporting a rise, no change

Eu ro pe

World

balance will be 25%) All data is not seasonally adjusted

Available space How has available space for occupation changed over the last three months compared to the previous three months for the leasing market

Change in available space

Balance of respondents,% 2008 2nd Qtr

100

2008 3rd Qtr.

available space rising

2008 4th Qtr.

2009 1st Qtr.

75 50

0

Australasia

73

-25

Western Europe

57

-50

Emerging Asia

56

Emerging Europe

42

North America

77

Am

&

M

id dl e

ev el op ed

La ti n

Ea st

As ia

ic a er Am or th

available space falling

Af ri c a

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

D

W

* Balance = Proportion of surveyors reporting a rise in prices minus those

N

21

Eu ro pe

Latin America

As ia

45

es te rn

73

Africa & Middle East

Au st ra la sia

Developed Asia

-75 -100

er gi ng

Balance*

25

Em

or fall in occupier demand over the last 3 months

er gi ng

Region

Em

Proportion of surveyors reporting a rise, no change

Eu ro pe

World

balance will be 25%) All data is not seasonally adjusted

Change in rents How have rents changed in the last 3 months compared to the previous 3 months?

Change in rents

Balance of respondents,% 2008 2nd Qtr

100

2008 3rd Qtr.

rents rising

2008 4th Qtr.

2009 1st Qtr.

75 50

W

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted balance will be 25%) All data is not seasonally adjusted

6

Am La ti n

Ea st &

M

id dl e

As ia

-18

* Balance = Proportion of surveyors reporting a rise in prices minus those

Af ri c a

-32

Latin America

ev el op ed

Africa & Middle East

rents falling

D

-87

a

Developed Asia

-75 -100 er ic

-76

Am

-74

North America

or th

Emerging Europe

-50

N

-69

Eu ro pe

Emerging Asia

-25

As ia

-52

er gi ng

Western Europe

0

Em

-75

er gi ng

Australasia

25

Em

Balance*

Eu ro pe

or fall in occupier demand over the last 3 months

rn

Region

es te

Proportion of surveyors reporting a rise, no change

Au st ra la sia

World


Lettings market activity Occupier enquiries Change in occupier enquiries

Balance of respondents,% 2008 2nd Qtr

100

2008 3rd Qtr.

2008 4th Qtr.

Proportion of surveyors reporting a rise, no change

Region

or fall in occupier demand over the last 3 months

50

Balance*

25

Australasia

-76

0

Western Europe

-43

-25

Emerging Asia

-55

Emerging Europe

-76

North America

-56

-75

Developed Asia

-48

-100

Africa & Middle East

-35

Latin America

-33

Western Europe

65

Emerging Asia

47

Emerging Europe

69

-75

North America

75

-100

Developed Asia

74

N

Am La ti n

id dl e M

Am La ti n

Ea st id dl e M &

a

or th

ev el op ed

As ia

er ic a Am

Eu ro pe in g

inducements falling

Af ri c

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

D

W

* Balance = Proportion of surveyors reporting a rise in prices minus those

er g

21

ia

44

Latin America

-50

Au st ra la s

Africa & Middle East

&

0 -25

As ia

85

Em

Australasia

2009 1st Qtr.

25

er gi ng

Balance*

Em

or fall in occupier demand over the last 3 months

2008 4th Qtr.

50

Eu ro pe

Region

2008 3rd Qtr.

inducements rising

75

rn

Proportion of surveyors reporting a rise, no change

2008 2nd Qtr

100

es te

World

Change in inducements

Balance of respondents,%

enquiries falling

Af ri c a

D

balance will be 25%) All data is not seasonally adjusted

How has typical value of any incentive packages to new tenants changed in your area compared to the previous three month period?

Ea st

As ia

er ic a

N

or th

ev el op ed

Am

Eu ro pe

As ia

er gi ng

er gi ng

Em

es te rn

W

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

Em

Au st ra la sia

-50

* Balance = Proportion of surveyors reporting a rise in prices minus those

Inducements

2009 1st Qtr.

75

World

Eu ro pe

How has the level of occupier enquiries changed in the last 3 months?

enquiries rising

balance will be 25%) All data is not seasonally adjusted

Proportion of surveyors reporting a rise, no change

Region

or fall in occupier demand over the last 3 months

50

Balance*

25

Australasia

-81

0

Western Europe

-63

-25

7

2009 1st Qtr.

Am La ti n

Ea st idd le M &

er ic a

As ia Af ri c a

balance will be 25%) All data is not seasonally adjusted

De ve lo pe d

W

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

Am

-12

No r th

Latin America

Eu ro pe

-31

er gi ng

-100

Africa & Middle East

Em

-75

-75

As ia

-81

Developed Asia

Au st ra la sia

North America

* Balance = Proportion of surveyors reporting a rise in prices minus those

2008 4th Qtr.

-50

er gi ng

-69

Em

-57

Emerging Europe

2008 3rd Qtr.

rents expected to rise

75

World

Emerging Asia

2008 2nd Qtr

100

Eu ro pe

How do you expect rents to change in the coming three months compared to the previous 3 month period?

Change in rental expectations

Balance of respondents,%

es te rn

Rental expectations

rents expected to fall


Development market activity Development pipeline

or fall in occupier demand over the last 3 months

50 25

Australasia

-90

0

Western Europe

-56

-25

id dl e

Am

pipeline development falling

Af ri c a

&

M

La ti n

Ea st

As ia

er ic a

ev el op ed

Am

D

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

or th

-28

* Balance = Proportion of surveyors reporting a rise in prices minus those

N

Latin America

Eu ro pe

-19

As ia

-29

Africa & Middle East

er gi ng

Developed Asia

-75 -100

Em

-80

es te rn

North America

2009 1st Qtr.

-50

W

-75

Au st ra la sia

-39

Emerging Europe

2008 4th Qtr

pipeline development rising

75

Balance*

Emerging Asia

2008 3rd Qtr

er gi ng

Proportion of surveyors reporting a rise, no change

Em

World Region

Change in pipeline development

Balance of respondents,% 2008 2nd Qtr. 100

Eu ro pe

How do you view the development pipeline compared to 3 months ago?

balance will be 25%) All data is not seasonally adjusted

Marketed properties How has the number of properties marketed by your company changed over the last 3 months compared to the previous 3 month period?

Change in number of marketed properties

Balance of respondents,%

2008 2nd Qtr

100

2008 3rd Qtr.

2008 4th Qtr.

rising

2009 1st Qtr.

75

World

Proportion of surveyors reporting a rise, no change

50

Region

or fall in occupier demand over the last 3 months

25

Balance*

0

Am La ti n

id dl e M &

ev el op ed

As

Ea st

ia

er ic a

falling

Af ri c a

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

D

W

* Balance = Proportion of surveyors reporting a rise in prices minus those

Am

5

or th

4

Latin America

N

26

Africa & Middle East

Eu ro pe

Developed Asia

-75 -100 As ia

-6

er gi ng

North America

-50

Em

10

er gi ng

5

Emerging Europe

Em

18

Emerging Asia

Eu ro pe

Western Europe

-25

es te rn

1

Au st ra la sia

Australasia

balance will be 25%) All data is not seasonally adjusted

Development completions How have development completions changed in the last 3 months compared to the previous 3 months?

Change in development completions Balance of respondents,% 2008 2nd Qtr. 2008 3rd Qtr 2008 4th Qtr 100

2009 1st Qtr.

development completions rising

75

World

Proportion of surveyors reporting a rise, no change

50

Region

or fall in occupier demand over the last 3 months

25

Balance*

0

balance will be 25%) All data is not seasonally adjusted

8

Am La ti n

Ea st &

M

id dl e

As ia

ev el op ed D

Af ri c a

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

er ic a

6

* Balance = Proportion of surveyors reporting a rise in prices minus those

Am

Latin America

or th

0

N

-11

Africa & Middle East

Eu ro pe

Developed Asia

-75 -100 As ia

-30

er gi ng

North America

-50

Em

-62

er gi ng

Emerging Europe

Em

-13

Eu ro pe

-36

Emerging Asia

es te rn

Western Europe

-25

W

-9

Au st ra la sia

Australasia

development completions falling


Investment market activity Capital values 2008 2nd Qtr

100

World

Proportion of surveyors reporting a rise, no change

75

Region

or fall in occupier demand over the last 3 months

50

-57

Emerging Europe

-83

North America

-91

-75

Developed Asia

-95

-100

Africa & Middle East

-43

Latin America

-57

80

Western Europe

55

Emerging Asia

11

-50

Emerging Europe

58

-75

North America

80

Developed Asia

90

balance will be 25%) All data is not seasonally adjusted

W

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted balance will be 25%) All data is not seasonally adjusted

9

Am La tin

Ea st &

Am La ti n

Ea st idd le M &

Am La ti n

Ea st id dl e M

-36

* Balance = Proportion of surveyors reporting a rise in prices minus those

&

Latin America

As ia

-28

Af ri c a

-67

Africa & Middle East

ev el op ed

Developed Asia

-75 -100

D

-63

er ic a

-65

North America

Am

Emerging Europe

-50

or th

-63

N

-49

Emerging Asia

Eu ro pe

Western Europe

0 -25

er gi ng

-31

As ia

Australasia

2009 1st Qtr.

25

Em

Balance*

2008 4th Qtr.

50

er gi ng

or fall in occupier demand over the last 3 months

Em

Proportion of surveyors reporting a rise, no change

2008 3rd Qtr.

investment bidders to rise

75

Eu ro pe

World Region

2008 2nd Qtr

100

es te rn

Please indicate if the number of investment bidders per property has changed over the last 3 months compared to the previous 3 month period

Change in investment bidders per property

Balance of respondents,%

Au st ra la sia

Investment bidders per property

yields expected to fall

Af ri c a

D

ev el op ed

As ia

er ic a

N

or th

Am

Eu ro pe er gi ng

es te rn

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

As ia

-100

W

11

* Balance = Proportion of surveyors reporting a rise in prices minus those

-25

Au st ra la sia

Latin America

1

Af ric a

0

Australasia

Africa & Middle East

2009 1st Qtr.

25

Em

Balance*

2008 4th Qtr.

50

er gi ng

or fall in occupier demand over the last 3 months

2008 3rd Qtr.

yields expected to rise

75

Em

Proportion of surveyors reporting a rise, no change

2008 2nd Qtr

100

Eu ro pe

World Region

Change in investment yields

Balance of respondents,%

values expected to fall

M

ev el op ed

or th N

balance will be 25%) All data is not seasonally adjusted

How have investment yields on commercial real estate changed over the past 3 months compared to the previous 3 months?

id dl e

As ia

er ic a Am

Eu ro pe

As ia

D

W

Au st ra la sia

-50

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

Investment yields

2009 1st Qtr.

0

Emerging Asia

* Balance = Proportion of surveyors reporting a rise in prices minus those

2008 4th Qtr.

-25

er gi ng

-67

Em

Western Europe

2008 3rd Qtr.

25

Em

-88

Eu ro pe

Australasia

es te rn

Balance*

values expected to rise

Change in capital values

Balance of respondents,%

er gi ng

Please indicate how capital values have changed over the last 3 months compared to the previous 3 month period

investment bidders to fall


Investment market activity Investor purchases offices How have investor purchases of real estate changed over the last 3 months compared to the previous 3 months, in terms of the number of sales? World

Proportion of surveyors reporting a rise, no change

Region

or fall in occupier demand over the last 3 months Balance*

Change in investor purchases for offices

Balance of respondents,% 2008 2nd Qtr

100

2008 3rd Qtr

2008 4th Qtr

investor purchases rising

2009 1st Qtr

75 50 25 0

-18

Am La ti n

Ea st &

M

id dl e

ev el op ed

As ia

er ic a Am

investor purchases falling

Af ri c a

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

D

* Balance = Proportion of surveyors reporting a rise in prices minus those

or th

-10

N

-49

Latin America

Eu ro pe

-49

Africa & Middle East

As ia

Developed Asia

-75 -100

er gi ng

-63

Em

North America

-50

er gi ng

-60

Em

Emerging Europe

Eu ro pe

-70

es te rn

-65

Emerging Asia

W

Western Europe

-25

Au st ra la sia

Australasia

balance will be 25%) All data is not seasonally adjusted

World

Proportion of surveyors reporting a rise, no change

50

or fall in occupier demand over the last 3 months

25

Balance*

2008 4th Qtr.

0

Western Europe

-63

Emerging Asia

-48

-50

Emerging Europe

-68

-75

North America

-65

Developed Asia

-58

Africa & Middle East

-59

Latin America

-20

World

Proportion of surveyors reporting a rise, no change

Region

or fall in occupier demand over the last 3 months Balance*

Balance of respondents,%

Am La ti n

Ea st idd le

Change in invetment purchases for industrial

2008 2nd Qtr

100

M

Af ri c a

D

balance will be 25%) All data is not seasonally adjusted

Investor purchases industrial

2008 3rd Qtr

investor purchases falling

&

N

or th

ev el op ed

As ia

er ic a Am

Eu ro pe

As ia

er gi ng

es te rn

W

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

Em

Au st ra la sia

-100

* Balance = Proportion of surveyors reporting a rise in prices minus those

How have investor purchases of real estate changed over the last 3 months compared to the previous 3 months, in terms of the number of sales?

2009 1st Qtr

-25

er gi ng

-35

2008 3rd Qtr

investor purchases rising

75

Region

Australasia

2008 2nd Qtr

100

Em

How have investor purchases of real estate changed over the last 3 months compared to the previous 3 months, in terms of the number of sales?

Change in investor purchases for retail

Balance of respondents,%

Eu ro pe

Investor purchases retail

2008 4th Qtr

investment purchases rising

2008 1st Qtr

75 50 25 0

-40 -65

-25

Emerging Asia

-43

-50

Emerging Europe

-63

North America

-62

10

Am La ti n

Ea st M

id dl e

As ia &

er ic a N

or th

Am

Eu ro pe

As ia

er gi ng

ev el op ed

Af ri c a

balance will be 25%) All data is not seasonally adjusted

D

reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted

Em

* Balance = Proportion of surveyors reporting a rise in prices minus those

er gi ng

-30

Em

-54

Latin America

Eu ro pe

-54

Africa & Middle East

es te rn

Developed Asia

-75 -100 Au st ra la sia

Western Europe

W

Australasia

investment purchases falling


RICS Global Commercial Property Survey Regional statistics - Developed Asia / Australasia Tenant Demand

-100

-80

-60

-40

Change in Rents

-20

0

20

40

60

80

-100

100

Hong Kong

Hong Kong

Japan

Japan

Singapore

Singapore

South Korea

South Korea

DEVELOPED ASIA

DEVELOPED ASIA

DA ex Japan

DA ex Japan

DA ex Jap/Korea

DA ex Jap/Korea

Australia

Australia

-60

-40

-20

0

20

40

60

80

100

New Zealand

New Zealand

AUSTRALASIA

AUSTRALASIA

DA + Australasia

DA + Australasia

Investment Bidders -100

-80

-80

-60

-40

Yields -20

0

20

40

60

80

100

-100

Hong Kong

Hong Kong

Japan

Japan

Singapore

Singapore

South Korea

South Korea

DEVELOPED ASIA

DEVELOPED ASIA

DA ex Japan

DA ex Japan

DA ex Jap/Korea

DA ex Jap/Korea

Australia

Australia

New Zealand

New Zealand

AUSTRALASIA

AUSTRALASIA

DA + Australasia

DA + Australasia

11

-80

-60

-40

-20

0

20

40

60

80

100


RICS Global Commercial Property Survey Regional statistics - Developed Asia / Australasia Pipeline Development

-100

-80

-60

-40

-20

Available space

0

20

40

60

80

100

-100

Hong Kong

Hong Kong

Japan

Japan

Singapore

Singapore

South Korea

South Korea

DEVELOPED ASIA

DEVELOPED ASIA

DA ex Japan

DA ex Japan

DA ex Jap/Korea

DA ex Jap/Korea

Australia

Australia

New Zealand

New Zealand

AUSTRALASIA

AUSTRALASIA

DA + Australasia

DA + Australasia

Inducements

-100

-80

-80

-60

-40

-20

0

20

40

60

80

100

Rental Expectations

-60

-40

-20

0

20

40

60

80

100

-100

Hong Kong

Hong Kong

Japan

Japan

Singapore

Singapore

South Korea

South Korea

DEVELOPED ASIA

DEVELOPED ASIA

DA ex Japan

DA ex Japan

DA ex Jap/Korea

DA ex Jap/Korea

Australia

Australia

New Zealand

New Zealand

AUSTRALASIA

AUSTRALASIA

DA + Australasia

DA + Australasia

12

-80

-60

-40

-20

0

20

40

60

80

100


RICS Global Commercial Property Survey Regional statistics - Americas Tenant Demand -100

-80

-60

Change in Rents -40

-20

0

20

40

60

80

100

-100

Canada

-60

-40

-20

0

20

40

60

80

100

-80

-60

-40

-20

0

20

40

60

80

100

Canada

US

US

NORTH AMERICA

NORTH AMERICA

Argentina

Argentina

Brazil

Brazil

Colombia

Colombia

Rest of Latin America

Rest of Latin America

LATIN AMERICA

LATIN AMERICA

Investment Bidders

-100

-80

-80

-60

-40

Yields

-20

0

20

40

60

80

100

-100

Canada

Canada

US

US NORTH AMERICA

NORTH AMERICA

Argentina

Argentina Brazil

Brazil Colombia

Colombia Mexico

Rest of Latin America

Rest of Latin America

LATIN AMERICA

LATIN AMERICA

13


RICS Global Commercial Property Survey Regional statistics - Americas Pipeline Development

-100

-80

-60

-40

Available space

-20

0

20

40

60

80

-100

100

Canada

Canada

US

US

NORTH AMERICA

NORTH AMERICA

Argentina

Argentina

Brazil

Brazil

Colombia

Colombia

Rest of Latin America

Rest of Latin America

LATIN AMERICA

LATIN AMERICA

Inducements -100

-80

-80

-60

-40

-20

0

20

40

60

80

100

Rental Expectations -60

-40

-20

0

20

40

60

80

100

-100

Canada

Canada

US

US

NORTH AMERICA

NORTH AMERICA

Argentina

Argentina

Brazil

Brazil

Colombia

Colombia

Rest of Latin America

Rest of Latin America

LATIN AMERICA

LATIN AMERICA

14

-80

-60

-40

-20

0

20

40

60

80

100


RICS Global Commercial Property Survey Regional statistics - Emerging Asia Tenant Demand -100

-80

-60

Change in Rents -40

-20

0

20

40

60

80

-100

100

China

China

India

India

Malaysia

Malaysia

Philippines

Philippines

Thailand

Thailand

Vietnam

Vietnam

EMERGING ASIA

EMERGING ASIA

EMERGING ASIA ex INDIA/CHINA

EMERGING ASIA ex INDIA/CHINA

Investment Bidders

-100

-80

-60

-40

-80

-60

-40

-20

0

20

40

60

80

100

-80

-60

-40

-20

0

20

40

60

80

100

Yields

-20

0

20

40

60

80

100

-100

China

China

India

India

Malaysia

Malaysia

Philippines

Philippines

Thailand

Thailand

Vietnam

Vietnam

EMERGING ASIA

EMERGING ASIA

EMERGING ASIA ex INDIA/CHINA

EMERGING ASIA ex INDIA/CHINA

15


RICS Global Commercial Property Survey Regional statistics - Emerging Asia Pipeline Development

-100

-80

-60

-40

Available Space

-20

0

20

40

60

80

-100

100

China

China

India

India

Malaysia

Malaysia

Philippines

Philippines

Thailand

Thailand

Vietnam

Vietnam

EMERGING ASIA

EMERGING ASIA

EMERGING ASIA ex INDIA/CHINA

EMERGING ASIA ex INDIA/CHINA

Inducements

-100

-80

-80

-60

-40

-20

0

20

-20

0

20

40

60

80

100

Rental Expectations

-60

-40

-20

0

20

40

60

80

100

-100

China

China

India

India

Malaysia

Malaysia

Philippines

Philippines

Thailand

Thailand

Vietnam

Vietnam EMERGING ASIA

EMERGING ASIA EMERGING ASIA ex INDIA/CHINA

EMERGING ASIA ex INDIA/CHINA

16

-80

-60

-40

40

60

80

100


RICS Global Commercial Property Survey Regional statistics - Western Europe Tenant Demand

-100

-80

-60

-40

Change in Rents

-20

0

20

40

60

80

-100

100

Belgium

Belgium

France

France

Germany

Germany

Italy

Italy

Luxembourg

Luxembourg

Portugal

Portugal

Republic of Ireland

Republic of Ireland

Sandinavia

Sandinavia

Spain

Spain

Switzerland

Switzerland

The Netherlands

The Netherlands

UK

UK

WESTERN EUROPE

WESTERN EUROPE

Investment Bidders

-100

-80

-60

-40

-80

-60

-40

-20

0

20

40

60

80

-40

-20

0

20

40

60

80

100

Yields

-20

0

20

40

60

80

100

-100

Belgium

Belgium

France

France

Germany

Germany

Italy

Italy

Luxembourg

Luxembourg

Portugal

Portugal

Republic of Ireland

Republic of Ireland

Sandinavia

Sandinavia

Spain

Spain

Switzerland

Switzerland

The Netherlands

The Netherlands

UK

UK

WESTERN EUROPE

WESTERN EUROPE

17

-80

-60

100


RICS Global Commercial Property Survey Regional statistics - Western Europe Pipeline Development

-100

-80

-60

-40

-20

Available Space

0

20

40

60

80

100

-100

Belgium

Belgium

France

France

Germany

Germany

Italy

Italy

Luxembourg

Luxembourg

Portugal

Portugal

Republic of Ireland

Republic of Ireland

Sandinavia

Sandinavia

Spain

Spain

Switzerland

Switzerland

The Netherlands

The Netherlands

UK

UK

WESTERN EUROPE

WESTERN EUROPE

Inducements -100

-80

-80

-60

-40

-20

0

-20

0

20

40

60

80

100

Rental Expectations -60

-40

-20

0

20

40

60

80

-100

100

Belgium

Belgium

France

France

Germany

Germany

Italy

Italy

Luxembourg

Luxembourg

Portugal

Portugal

Republic of Ireland

Republic of Ireland

Sandinavia

Sandinavia

Spain

Spain

Switzerland

Switzerland

The Netherlands

The Netherlands

UK

UK

WESTERN EUROPE

WESTERN EUROPE

18

-80

-60

-40

20

40

60

80

100


RICS Global Commercial Property Survey Regional statistics - Emerging Europe Tenant Demand

-100

-80

Change in Rents

-60

-40

-20

0

20

40

60

80

100

-100

Bulgaria

Bulgaria

Croatia

Croatia

Czech Republic

Czech Republic

Hungary

Hungary

Poland

Poland

Romania

Romania

Russia

Russia

Turkey

Turkey

Ukraine

Ukraine

-60

-40

-20

0

20

40

60

-80

-60

-40

-20

0

20

40

60

80

100

EMERGING EUROPE

EMERGING EUROPE

Budapest, Prague and Warsaw

Budapest, Prague and Warsaw

Rest of Emerging Europe

Rest of Emerging Europe

Investment Bidders

-100

-80

-80

-60

Yields

-40

-20

0

20

40

60

80

-100

100

Bulgaria

Bulgaria

Croatia

Croatia

Czech Republic

Czech Republic

Hungary

Hungary

Poland

Poland

Romania

Romania

Russia

Russia

Turkey

Turkey

Ukraine

Ukraine

EMERGING EUROPE

EMERGING EUROPE

Budapest, Prague and Warsaw

Budapest, Prague and Warsaw

Rest of Emerging Europe

Rest of Emerging Europe

19

80

100


RICS Global Commercial Property Survey Regional statistics - Emerging Europe Pipeline Development

-100

-80

-60

-40

Available Space

-20

0

20

40

60

80

100

-100

Bulgaria

Bulgaria

Croatia

Croatia

Czech Republic

Czech Republic

Hungary

Hungary

Poland

Poland

Romania

Romania

Russia

Russia

Turkey

Turkey

Ukraine

Ukraine

EMERGING EUROPE

EMERGING EUROPE

Budapest, Prague and Warsaw

Budapest, Prague and Warsaw

Rest of Emerging Europe

Rest of Emerging Europe

Inducements

-100

-80

-60

-40

-20

0

20

40

60

80

-40

-20

0

20

40

60

80

100

Rental Expectations

-80

-60

-40

-20

0

20

40

60

80

100

-100

Bulgaria

Bulgaria

Croatia

Croatia

Czech Republic

Czech Republic

Hungary

Hungary

Poland

Poland

Romania

Romania

Russia

Russia

Turkey

Turkey

Ukraine

Ukraine

EMERGING EUROPE

EMERGING EUROPE

Budapest, Prague and Warsaw

Budapest, Prague and Warsaw

Rest of Emerging Europe

Rest of Emerging Europe

20

-80

-60

100


RICS Global Commercial Property Survey Regional statistics - Africa and Middle East Tenant Demand -100

-80

-60

Change in Rents -40

-20

0

20

40

60

80

100

-100

Saudi Arabia

Saudi Arabia

South Africa

South Africa

UAE

UAE

Africa Ex SA

Africa Ex SA

Middle East

Middle East

Africa

Africa

Africa & Middle East

Africa & Middle East

Investment Bidders -100

-80

-60

-40

-80

-60

-40

-20

0

20

40

60

80

100

-80

-60

-40

-20

0

20

40

60

80

100

Yields -20

0

20

40

60

80

100

-100

Saudi Arabia

Saudi Arabia

South Africa

South Africa

UAE

UAE

Africa Ex SA

Africa Ex SA

Middle East

Middle East

Africa

Africa

Africa & Middle East

Africa & Middle East

21


RICS Global Commercial Property Survey Regional statistics - Africa and Middle East Pipeline Development -100

-80

-60

-40

-20

Available Space 0

20

40

60

80

100

-100

Saudi Arabia

Saudi Arabia

South Africa

South Africa

UAE

UAE

Africa Ex SA

Africa Ex SA

Middle East

Middle East

Africa

Africa

Africa & Middle East

Africa & Middle East

Inducements -100

-80

-80

-60

-40

-20

0

20

40

60

80

100

-20

0

20

40

60

80

100

Rental Expectations -60

-40

-20

0

20

40

60

80

-100

100

Saudi Arabia

Saudi Arabia

South Africa

South Africa

UAE

UAE

Africa Ex SA

Africa Ex SA

Middle East

Middle East

Africa

Africa

Africa & Middle East

Africa & Middle East

22

-80

-60

-40


RICS Global Commercial Property Survey Survey Methodology RICS Global Commercial Property Survey RICS’ Global Commercial Property Survey is a quarterly guide to the developing trends in the commercial property investment and occupier market. This edition details market conditions for the first quarter of 2009 based on information collected from leading international real estate organisations and local firms. This survey of the UK Commercial Market was conducted in conjunction with YouGov, a leading online research company. 361 surveyor offices responded to the questionnaire conducted between 19/03/2009 and 07/ 05/2009. This survey was run in accordance with MRS guidelines. YouGov have been appointed to conduct the majority of RICS surveys from December 2008. Methodology Survey questionnaires were sent to real estate organisations in March 2009, with responses received up until the 7th of May 2009. Respondents were asked to compare conditions over the latest Three months with the previous three months. A total of 361 responses were received. Responses have been amalgamated across the three real estate sub-sectors of offices, retail and industrial property at a city level, to form diffusion indices for the commercial market as a whole. The eight world regional groupings have been derived through the weighting of city level diffusion data using city population and country gross domestic product statistics. Contact details For further information please contact RICS Communications Directorate T +44 (0)20 7334 3774/3891 Taking part in the RICS Global Property Survey If you wish to participate in the quarterly survey, please email jguilfoyle@rics.org to register your details. Please provide your name, company details and the location(s) you wish to cover within the email or register online at www.rics.org/globalproperty Become a member of RICS If you would like to find out more about becoming a member of RICS, please visit www.rics.org/professional

RICS Global Commercial Property Survey Disclaimer This document is intended as a means for debate and discussion and should not be relied on as legal or professional advice. Whilst every reasonable effort has been made to ensure the accuracy of the contents, no warranty is made with regard to that content. Data, information or any other material may not be accurate and there may be other more recent material elsewhere. RICS will have no responsibility for any errors or omissions. RICS recommends you seek professional, legal or technical advice where necessary. RICS cannot accept any liability for any loss or damage suffered by any person as a result of the editorial content, or by any person acting or refraining to act as a result of the material included.

23


RICS Global Commercial Property Survey Subscription information and contributor enquiries The Quarterly Global Commercial Property Survey is available from the RICS web site - www.rics.org, along with other quarterly surveys covering the housing market, residential lettings, commercial property, construction activity, the farmland market and arts and antiques.

This publication has been produced by RICS Economics. For economic and statistical enquiries regarding this publication, please contact. Oliver Gilmartin RICS Senior Economist Communications Directorate Tel +44 (0)20 7334 3847.

The Royal Institution of Chartered Surveyors 12 Great George Street Parliament Square London SW1P 3AD T +44 (0)20 7222 7000 F +44 (0)20 7334 3846

24

RICS represents 140,000 members worldwide. These professionals provide expert advice on land, property, construction and the associated environmental issues. An independent, not-for-profit organisation, RICS acts in the public interest, upholding standards of competence and integrity among its members and providing impartial, authoritative advice on issues affecting business and society.

RICS Global Commercial Property Survey Q1 2009  

Q2 2008 -37 -17 2 32 Q3 2008 -56 -39 -12 43 Q4 2008 -78 -72 -50 60 Q1 2009 -56 -51 -66 63 ** Balance = Proport ion of surveyors report ing a...

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