25 July 2016
DUBAI -- The RICS Global Cities Commercial Property Monitor continues to show increasingly contrasting trends in current sentiment towards investment and occupier markets across key cities around the globe.

Occupier demand in the UAE fell across all sectors for the third consecutive quarter with 23% more surveyors reporting a fall rather than a rise in tenant interest. The supply of available space continued to increase as the development activity of recent years feeds into the marketplace and the greater economic slack leads to more vacancies.

Investor demand fell across all segments of the UAE market for the third consecutive quarter with demand from international buyers also easing. 10% of contributors reported a deterioration in credit conditions in Q2, the third consecutive tightening in lending standards. The largest proportion (45%) of contributors think that current prices are around fair value while 42% think that they are still expensive relative to fundamentals.

The most noteworthy development visible in the Q2 results comes in London, where the Brexit vote has had a noticeably adverse effect on market sentiment. Capital value and rental expectations both lurched into negative territory in the aftermath of the decision. Investment inquiries contracted sharply as political and economic uncertainty ushered in a heightened sense of caution. Whether or not the initial fall is a knee-jerk reaction that will unwind as the result is digested, or the start of a more prolonged downturn, remains to be seen (54% of respondents now feel the market is in an early downturn phase).

Challenging macroeconomic climate continues to weigh on market sentiment while weak commodity prices are impacting a number of cities including, Geneva, Zurich, Hong Kong, Doha and Athens.

© The Saudi Gazette 2016