Property markets in the more dynamic economies of South America, Asia and Eastern Europe are outperforming those in the UK and Eurozone, according to the latest RICS Global Property Survey

Occupier demand for commercial property is rising in the majority of countries across the globe with the notable exception of the UK and Eurozone countries where the tough measures that have been taken to reduce fiscal deficits appear to be having a more pronounced impact on the appetite from businesses to take up new space.

Significantly, France is bucking the negative Eurozone trend with signs of an upturn in sentiment towards real estate reflecting, in part, the relatively resilient performance from the domestic economy. Significantly, surveyors in the US reported a rise in tenant demand across all three sectors for the first time in 3 years.

Brazil is leading the way with the net balance of surveyors reporting a rise in occupier demand moving from 70% to 85% with markets in Peru and China also performing well. By way of contrast, demand in the UK turned negative for the first time in a year with the net balance falling from a positive 14% to a negative 4% while the net balances in Spain, Germany and Greece are all in negative territory.

Transactions fell in the UK for the first time in a year with the net balance of surveyors reporting a fall in activity sliding from a positive 24% to a negative 5%. More surveyors also reported a drop (than a rise) in activity in both the UAE and Greece.

Indicators in China still remain strong despite measures introduced by the Chinese government to address the property boom. Indicators for occupier demand, rental expectations and the number of investment bidders per property all remain firmly in positive territory. Elsewhere in Asia, the latest numbers from India suggest a strong showing from real estate in the second quarter despite the increase in interest rates.

Looking forward into the third quarter of 2010, sentiment towards capital values is particularly strong in France, Peru and Brazil while surveyors are most optimistic on rental increases in Brazil, Hong Kong and Peru.

Simon Rubinsohn, chief economist at RICS, said: “The real estate world continues to be split broadly speaking between the emerging and developed economies. Strong growth in many of the former, including the likes of Brazil, Hong Kong and India, is continuing to boost demand for new space from occupiers as well as encouraging investment activity. Meanwhile in many of the latter, fiscal retrenchment allied to bank de-leveraging continues to place significant obstacles in the way of a meaningful recovery in the commercial property market.”