Investors flee emerging property markets: survey

Investors flee emerging property markets: survey


LONDON – Cash-thirsty investors are being forced to abandon plans for investment in emerging property sectors because of persistent problems in global money markets, the Royal Institution of Chartered Surveyors said on Thursday.


In its quarterly Global Commercial Property Survey, RICS said investor appetite for risk had plunged since the onset of the credit crunch, squeezing transaction volumes in emerging Europe, Asia and Latin America.


‘A beacon of credit crunch resilience in the second half of 2007, it seems investors are now less sure of the potential higher returns on offer in emerging markets,’ the report said.


Respondents were also less than confident about resilience of commercial property values in developed Asia, North America and Australasia in the second quarter of 2008, with prices forecast to fall at almost double the pace of western Europe.


‘With prime yields across some emerging European cities now on par with those in developed markets, it is little surprise that investors have turned cautious on a relative valuation basis when risk is factored into the equation,’ said RICS Senior Economist Oliver Gilmartin.


‘Tenant demand is still rising across emerging markets although at a more muted pace as multinationals feel the pinch from tougher economic times,’ Mr Gilmartin said.


RICS said African and Middle Eastern markets were likely to buck this trend as fast-growing petrodollar businesses based in cities such as Dubai and Doha spurred demand for commercial property space. — REUTERS


Source: Business Times

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