RICS Monitor: CRE Outlook Turns Slightly More Positive

Commercial real estate sentiment across the globe is gradually recovering, according the most recent Global Commercial Property Monitor survey released by the Royal Institution of Royal Surveyors in London. Responses from CRE occupiers and investors from all over the world show early signs of improvement in demand.

Senior Economist Tarrant Parsons told Commercial Property Executive Senior Editor Laura Calugar that the first quarter of 2024 was the second successive quarter in which RICS’ indexes turned less negative.

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Looking at each world region separately, Asia Pacific stands out due to the strong contrast between India and China, with the first one still among the strongest markets that RICS tracks globally, and the other one continuing to post weak results. In Europe, the Central Bank could be among the first major banks to cut interest rates, a move expected later this year that should help European markets. Meanwhile, in the Middle East and Africa, strong demand is anticipated to drive further growth in both rents and capital values. Saudi Arabia remains a powerhouse when it comes to expansion across the CRE sector. In Northern America, survey participants noted that the U.S. retail sector is undergoing a strong rebound on the occupier side.

“Global economic growth is expected to remain relatively sluggish, but if all goes to plan, it should lay the groundwork for a more meaningful acceleration in 2025,” said Parsons toward the end of this podcast episode.

Here’s what else he touched on:

The gradual recovery in CRE sentiment across the globe (0:43)

Credit conditions (2:30)

Construction activity (3:35)

The gap in expectations for prime, secondary and alternative assets (4:35)

Office conversions (5:53)

CRE sentiment across the APAC region (7:24)

Current economic conditions in Europe (8:47)

Strong demand conditions expected in the Middle East and Africa (10:29)

North America sees small signs of improvement (12:01)

Possible rate cuts this year (13:15)

What investors and occupiers should expect going forward (14:30)

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