According to the latest RICS Global Commercial Property Survey, agents in approximately three quarters of the almost 50 countries represented reported greater demand from tenants for commercial property in the final three months of last year, compared to Q3 2010. The survey also found that expectations for both rents and capital values continue to improve.

Rental expectations for Q1 2011 are most positive in Central and South America and Asia. RICS report: ‘The responses from Peru are particularly upbeat but, amongst the major markets, Hong Kong, China, Singapore and Brazil lead the way. Russia also scored well on the likely trend in rents. The contrast to this is provided by Greece, Spain, the Republic of Ireland and Japan where the net balance of respondents, continue to foresee further rental declines.

‘Meanwhile, there is increasing evidence to suggest that the US commercial property market also seems to be improving. This, in turn, seems to be driving a positive swing in US investor sentiment. Investment transaction activity rose quarter over quarter as did the number of investment bidders per property. Rental expectations, while still in negative territory, were less so than previously.’

In Brazil, tenant demand remains strong report RICS, while the need to rely on inducements to let space has fallen sharply compared with the previous quarter and so have the number of properties available to rent. However, the real estate sector will have to cope with further interest rate increase over the course of this year.

This should not be a problem in India as the report suggests that despite the prospect of further interest rates hikes during the first half of 2011 tenant demand is continuing to increase and this is being reflected in rising rents.