With foreign investors snapping up properties in central London and experienced UK buyers expanding their portfolios across Europe, it is important to keep an eagle eye on what is going on across the entire continent.
Successes and failures
The latest Global Commercial Property Survey by the Royal Institution of Chartered Surveyors (RICS) has revealed that while Asia and the Middle East are exhibiting good signs of recovery, the story in Europe is not so cheery. It is no surprise that most of the foreign landlords buying properties in the UK come from both these regions, as investment is gaining traction in such areas. Europe, on the other hand, has seen both success and disappointment as the ongoing recession in the area has hit the sector hard.
Germany, which boasts the largest economy in Europe, is one of the few to buck this trend, as both growth and sentiment have been positively boosted in the past few months. The RICS Investment Sentiment Index has now climbed from 18 to 22, meaning that this nation may be your best bet for a quick buck. Belgium, Austria, Ireland and Switzerland are other countries that are not performing as well, but have seen investor confidence on the rise.
However, the picture is not so great for most other countries. Spain, Greece and Poland may be seeing increased appetites for commercial property, but this is yet to actually be translated into fully-forged deals.
Meanwhile, demand and interest seems to be declining extremely quickly in France and the Netherlands. This means that capital values and rents are not only falling at a very fast pace in these countries, but they are expected to decrease even further towards the end of 2013.
Simon Rubinsohn, RICS chief economist, said: "The results of the survey show that the weak economic picture across much of Europe is continuing to be reflected in the lack of demand to occupy property space. Not surprisingly in the light of this, the rental outlook remains depressed away from prime real estate in key centres."
The rest of the world
Beyond Europe, the situation seems a lot brighter. Sentiment and investment deals have been on the rise in the UAE property market, while Brazil continues to see rental values and demand increasing in the run-up to both the World Cup 2014 and Olympics 2016. Even though short-term confidence seems to be slightly waning, industry analysts have suggested that long-term returns in Brazil seem very positive for the meantime. The US and Canada were also generally performing well, despite mixed economic data.
Japan is leading the pack for an upbeat Asian market, as not only is investor demand rife but the property sector is providing strong results for the occupier market. India remains flat, which still is good news considering that the central bank is dealing with a difficult economy and a volatile currency.
As the UK remains a 'safe haven' for worldwide investors, for those wanting to branch out, they should do so with caution. While investment figures seem bright, it is clear that we are not out of the woods just yet, and that recovery is sluggish at best.