NEW YORK, Nov. 10, 2008 (GLOBE NEWSWIRE) -- The Royal Institution of Chartered Surveyors (RICS), the world's largest organization for professionals in property, land, construction and related environmental issues, today released its highly regarded RICS Global Commercial Property Survey for the third quarter of 2008. The survey, which is a strong lead indicator for property market trends, measures the sentiment of executive-level commercial property professionals from eight regions around the globe.
This latest report illustrates the damaging impact of the global economic downturn with no region escaping unscathed. In the U.S., the woes of the financial system and lack of liquidity, are starting to show in the commercial real estate market, with all sub markets (office, retail and industrial) experiencing extremely weak conditions. In particular there has seen a steep decline in:
* Investment demand * Tenant demand * Rental growth
This has been coupled with a steep increase in inducements to occupiers and a rise in cap rates in all major sub sectors of the markets.
"With the current capital market turmoil, most investors and capital sources are on the sidelines. For most sectors, funds have raised substantial capital in anticipation of value opportunities, but are still largely waiting for a clearer signal that normalcy has returned. We are experiencing an unprecedented time in our industry," said Matt Bruck, managing director, RICS.
Similar downward investment trends have also been shown across Developing Asia, and for the first time, in Emerging Europe. Russia has been particularly affected with sharp decreases in activity coupled with a decline in tenant activity. In terms of Occupier Demand, India has been significantly impacted with 45% of respondents from this region reporting a fall compared to just 6% in the last quarter.
While Latin America, Africa and the Middle East have overall fared better than other regions, the survey shows a worsening downward trend with purchasing activity starting to plateau.
"The deterioration in the global economy is now clearly visible in both investment and tenant demand for commercial property. No longer is the weakness confined to the developed world. Indeed, the near term outlook is for the picture to worsen with the U.S. close to the bottom of the league. Despite the aggressive response from the Federal Reserve, rents and Capital values in the U.S. are set to fall further," said Simon Rubinsohn, senior economist, RICS.
About the 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. RICS members worldwide submitted office, retail and industrial market data for their respective markets, which was then compiled and analyzed on a global scale. This edition details market conditions for the third quarter of 2008 based on information collected from leading international real estate organizations and local firms.
Methodology
Survey questionnaires were sent to real estate organizations in September 2008, with responses received up until the September 31st 2008. Respondents were asked to compare conditions over the latest three months with the previous three months. 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.
NOTE: FOR A COPY OF THE FULL SURVEY AS WELL AS ACCESS TO MATT BRUCK AND SIMON RUBINSOHN, PLEASE CONTACT BARRY SCHWARTZ.
About RICS & RICS Americas
RICS (Royal Institution of Chartered Surveyors), with headquarters in London, is the largest organization for credentialed professionals in property, land, construction and related environmental issues worldwide. We promote best practice, regulation and consumer protection to business and the public. Over 140,000 members in more than 146 countries operate across 17 disciplines, from development, brokerage and construction to environmental issues, valuation and fine arts appraisal. RICS is the pre-eminent source of real estate-related knowledge, providing independent, impartial advice to governments and global organizations. www.rics.org. The RICS credentials -- MRICS and FRICS -- are granted to practitioners who demonstrate professional competence and the highest standards of business practice and ethics through stringent evaluation procedures. RICS Americas, based in New York and covering North, Central and South America and the Caribbean, has over 3,000 members in commercial and residential development, construction management, brokerage, planning and finance. For further information visit www.ricsamericas.org or e-mail RICS Americas at ricsamericas@rics.org.