RICS Monitor: CRE Sentiment at Best Level in 2 Years

The global real estate market is in the early stages of recovery, according to the latest survey by the Royal Institution of Chartered Surveyors in London. In fact, the indicators tracking lending conditions posted the most positive reading since 2015, but this doesn’t mean there aren’t any elements that could derail global business activity.

“We need to avoid seeing a re-escalation in inflationary pressures to allow a continued easing in monetary policies to support the market,” Senior Economist Tarrant Parsons told Commercial Property Executive Senior Editor Laura Calugar in this podcast episode.

Improving credit conditions are laying the foundation for an uplift in investment activity. Parsons highlighted two markets that have already seen a noteworthy improvement on where they were six months ago: Spain and the U.S. Overall, investment demand growth has accelerated in the third quarter of the year in both of these countries.

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“There’s still a long way to go, but the improvement in the lending environment in recent months has been reflected in a slightly more positive tone across the market of late,” Parsons said.

A large share of respondents in the U.S. feel their markets have reached the bottom and the conditions will improve as we move toward next year. However, the office sector remains an area of concern, but the decline in interest rates should relieve part of that pressure. For industrial and prime retail, demand is gaining traction and there are reasons to expect improved performance on the course of 2025, the latest Global Commercial Property Monitor found.  

Here’s a sample of what else Parsons and Calugar talked about:

• Overall sentiment and potential risks (1:10)
• World areas that stand out in terms of more positive results (2:13)
• The impact of loosening credit conditions on CRE investment (3:19)  
• Market polarization (4:34)
• Expectations for rents and capital values (5:48)
• The mixed picture stemming from the region (7:36)
• Occupier and investor sentiment across Europe (9:15)
• The outlook for Middle East and Africa (10:41)
• Highs and lows in North America (11:54)
• The U.S. elections (13:14)
• What to expect for 2025 (14:45)

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