May 2, 2019 – RICS has issued its 2019 Q1 Global and U.S. Commercial Property Monitor reports on the latest real estate market sentiments. The U.S. report indicates momentum across occupier and investment markets, with increasing demand for office and industrial space. However, the retail sector has shown decreased interest.
RICS indicators show the ongoing consumer shift toward online shopping has contributed to the rising availability of retail space, prompting landlords to increase the value of incentive packages offered to tenants in this market. Meanwhile, prime office and industrial assets are expected to see modest gains in rents and capital values over the coming twelve months, contrasting the downbeat retail sector outlook. The prime industrial market is expected to provide the strongest growth with prime office and secondary industrial to show modest growth while retail lags in both primary and secondary segments.
The 2019 Q1 Commercial Property Monitor results derive from survey questionnaires sent out on March 13, 2019, with responses received by April 14, 2019. Respondents were asked to compare conditions over the latest three months with the previous three months, as well as their views on the overall economic outlook.
In general, the results for the U.S. have remained flat for the past few quarters, with modestly positive indicators for both the occupier and investor markets. The majority of contributors continue to view the market as being in mid-upturn or in the peak phase of the cycle, with capital values perceived likely to post small increases over the next twelve months, save for retail and secondary offices. The majority of contributors to the survey view the market to be in the peak phase of the property cycle, and more than half of the survey’s contributors believe that commercial property is stretched to some extent.
RICS U.S. and Global Commercial Property Monitors are a quarterly guide to the trends in the commercial property investment and occupier markets. The reports are available from the RICS website http://www.rics.org/economics, along with other surveys covering the housing market, residential lettings, commercial property, construction activity and the rural land market.