RICS Global Commercial Property Survey - U.S. Shows More Signs of Recovery; Brazil Continues to Outperform

- U.S. capital value expectations finally turn positive although the rental outlook remains more subdued

- Canadian capital value and rental expectations improve again

- Brazil continues to post strongly positive readings for both rental and capital value expectations

NEW YORK, Feb. 15, 2011 /PRNewswire/ -- RICS Americas releases Q4 2010 Global Commercial Property survey.

RICS Global Commercial Property Survey Q4 2010

The Q4 2010 RICS Global Commercial Property Survey suggests that sentiment in North America has rebounded, with respondents in the U.S. and Canada more optimistic that the worst is behind them. Meanwhile, Latin America continues to record robust results, particularly Brazil and Argentina, where confidence is high.

Global Commercial Property Survey reported greater demand from tenants for commercial property in the final three months of last year. The survey, published today (February 15, 2011), also found that expectations for both rents and capital values on balance continue to improve.

RICS' Global Commercial Property Survey is a quarterly guide to the developing trends in commercial property investment and occupier markets in close to 50 countries around the world. The current edition details market conditions for the fourth quarter of 2010 based on information collected from leading international real estate organizations, local firms and other property professionals.

Key Findings:

Regional Highlights

U.S.

There is increasing evidence to suggest that the U.S. commercial property market also seems to be improving. Capital expectations picked up this quarter, showing a positive net balance of +15. This, in turn, seems to be driving a positive swing in U.S. investor sentiment. Investment transaction activity rose quarter over quarter (from +28 to +36) as did the number of investment bidders per property. Rental expectations, while still in negative territory, were less so than previously.

Net Balances: Net balance percents are calculated by subtracting the numbers of respondents reporting 'down' from the number who reported 'up.'

Canada

In Canada, the recovery process is a little more advanced. Capital value expectations moved further into positive territory (the net balance increased from 43 to 46) helped by a sharp jump in investment demand. It showed a significant improvement in Q4, with the net balance jumping from 31 to 74. Tenant demand also recorded strong growth in the fourth quarter while the availability of stock fell for the first time since the first quarter of 2008. Against this backdrop, it is not surprising that rental expectations continue to rise (the net balance jumped from 4 to 19). Meanwhile, respondents in Brazil remain upbeat about the prospects.

Brazil

Although fiscal retrenchment may result in a modest slowdown in Brazil's GDP in 2011, agents report both firm rental expectations and a positive outlook for capital values. Tenant demand remains strong while the need to rely on inducements to let space has fallen sharply compared with the previous quarter. Indeed, the availability of property to let has dropped quite noticeably in recent periods. However, the real estate sector will have to cope with further interest rate increases over the course of the year.

Commenting on the survey, Simon Rubinsohn, RICS' Chief Economist, said: "Sentiment seems to be improving across much of the global commercial property market. Solid growth in Asia, Latin America and parts of Eastern Europe is providing significant support for the real estate sector. Indeed, a key reason for central banks raising interest rates in these parts of the world is to head off concerns over the re-emergence of another asset price bubble. Even so, our suspicion is that these markets will see the strongest gains in capital values over the course of 2011.''

Notes to Editors:

About the Survey: RICS Global Commercial Property Survey is a quarterly guide to developing trends in the commercial property investment and occupier market. The key findings for RICS Americas Commercial Property are part of the RICS Global Commercial Property Survey. The Survey may be found here: http://www.ricsamericas.org/surveys-and-reports.html.

Respondents were asked to compare conditions in Q3 2010 to conditions in Q4 2010. Responses for this survey were collected until January 4, 2011 and amalgamated, at a country level, across the three real estate sub-sectors of offices, retail and industrial property to form diffusion indices for the commercial market as a whole.

About RICS

RICS is the world's leading qualification when it comes to professional standards in land, property and construction. In a world where more and more people, governments, banks and commercial organizations demand greater certainty of professional standards and ethics, attaining RICS status is the recognized mark of property professionalism.

Over 100,000 property professionals working in the major established and emerging economies of the world have already recognized the importance of securing RICS status by becoming members.

RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.

SOURCE RICS Americas