India has experienced a significant commercial property downturn in Q3 2008. Rising interest rates, higher inflation and a continuing lack of liquidity is having a significant impact on business confidence, with 45 per cent more Chartered Surveyors reported a fall in occupier demand compared to just 6 per cent in the last quarter.
The balance of surveyors reporting investor purchases plummeted from a flat zero balance to -73.
However, commercial property in China has remained relatively firm in the face of a global economic downturn. Most of the Chinese indicators remain in positive territory, with both supply and demand holding up and expectations generally upbeat. Aound 14 per cent more Chartered Surveyors expect an increase in floor space to be let and sold throughout China in the coming months while 18 percent more surveyors are reporting a rise in capital values
Emerging Europe witnessed the biggest slump in capital values out of all regions with 46 percent more Chartered Surveyors reporting a fall than a rise compared to 1 per cent reporting a rise in Q2. Around 80 per cent of the banking sector is owned by Western European banks and the supply of foreign currency lending to local subsidiaries has been severely restricted. The hardest hit country is Russia with the net balance of surveyors reporting falls in investment demand jumping from a positive 16 percent to -79.
In the UK, the ongoing drag from the credit crunch continues to depress sentiment - especially in the Central London Office market where recent worry over the health of the hedge fund industry is only adding to a sense of pessimism. This is in stark contrast with Germany where demand and confidence is still high despite dropping capital values. In Germany the net balance of Chartered Surveyors reporting a rise than a fall in tenant demand is currently at 18 per cent compared to a depressed -52 per cent in the UK.
There is little good news from the US where the property market continues to suffer from a lack of liquidity. The proportion of surveyors reporting falls in pipeline developments has jumped from 48 per cent to 79 per cent