RICS COMMERCIAL PROPERTY SURVEY Q2 2009
HONG KONG, July 23 /PRNewswire-Asia/ -- Tenant demand fell in UK in the second quarter of 2009 although the pace of decline eased back markedly. In fact, the net balances for new enquiries and confidence were the least negative since the start of the downturn in the third quarter of 2007 says, RICS Commercial Property Survey published on 20 July 2009.
The moderate pace of decline in tenant demand points towards a mild improvement in the lettings market particularly in the office sector where the net balance actually turned positive for the first time since the third quarter of 2007. In aggregate, 13 percent more Chartered Surveyors reported a fall than a rise in tenant demand compared with 40 percent in the first quarter. In the office sector, one percent more surveyors reported a rise than a fall in tenant demand up from a negative reading of 37 percent in Q1.
New enquiries to occupy business space were relatively flat although the net balances for office and industrial space turned positive for the first time since the downturn got underway.
Enquiries for retail space remain depressed with the Central London market the weakest performer.
The net balance of surveyors reporting a rise in available floor space rose at a lesser pace having picked up at a record clip in the previous quarter. Rising available space continued to be reported across all regions with the exception of the London industrial market where available space was largely unchanged. 43 percent more Chartered Surveyors reported a rise than a fall in available floor space down from 65 percent in Q1.
The ongoing contraction in the economy and the continuing rise in available floor space have weighed on surveyor expectations for the rental outlook. Surveyors remain pessimistic with 53 percent of surveyors expecting a fall than rise in rents. Despite the mild improvements on the demand side, rental expectations remain bleakest in the Central London office market.
Mr. David Faulkner, Vice Chairman of RICS Hong Kong said, "After several quarters of negative sentiment the decline in occupier demand in the UK is stabilizing, but the outlook for rental growth, especially in the office sector, is still negative as demand fails to keep up with new supply. This is mirrored in Hong Kong, although with limited new supply forecast for the core areas, rents are likely to stabilize sooner as demand begins to pick up. The performance of the Hong Kong stock market and increased sales activity in the residential sector suggests a renewed optimism which should lead to increased occupier demand later in the year."
About RICS & RICS Asia
RICS (Royal Institution of Chartered Surveyors) 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 the worlds' leading qualification when it comes to professional standards in land, property and construction. With over 140,000 members globally, RICS represents, regulates and promotes the work of property professionals throughout 146 countries.
The RICS Asia supports a network of over 9,000 individual professionals across the Asia region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.
The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For further details, please visit our new website: http://www.ricsasia.org