International Property Journal - News and information on global property markets

Demand for commercial property in Europe is growing, but it’s emerging markets leading the recovery, according to the latest survey by the Royal Institution of Chartered Surveyors.

Data points to a “two speed” recovery, the RICS says. Emerging Asia and Latin America led the way in the third quarter, in particular China, Hong Kong, Brazil and Singapore.

Sifting through the rhetoric about declining growth rates and “easing” markets, the latest study of distressed commercial property reveals sharp divisions developing in global markets.

In particular, while the United States and western Europe continue to see substantial increased in distressed sales, Brazil, Russia, India and Hong Kong are among the markets showing signs of stabilization in foreclosures, according to the new survey by the RICS, the Royal Institution of Chartered Surveyors.

Jones Lang LaSalle’s latest study found global commercial real estate investment has more than doubled since the dark days of 2009, which makes for a nice headline.

But the real story was the disparity in investment activity from region to region. Asia, for example, saw investment volumes drop by 34 percent from the first quarter of 2010, despite increases in Hong Kong and Taiwan.

Investors looking for the next wave of residential growth should target Peru, Panama and Brazil, a new report on global markets suggests.

Strong economic growth, low interest rates and continued housing boom make Latin America, in general, far more appealing than other regions, according to the latest recommendations from the Global Property Guide, which tracks markets around the world.

The site’s analysis, which is weighted toward rental yields, is less kind to Europe, where “property markets have not sufficiently adjusted from their 15-year rise.” And while Asia valuations are skyrocketing, GPG believes the region is already “over-valued,” except for locales like Malaysia and riot-torn Thailand.

Billionaire investor Sam Zell may not know the media game—evidenced by his disastrous ownership of the Tribune Company—but he’s still a master of real estate, with his every move closely tracked. And these days Zell is focusing on Brazil.

This week Zell’s Equity International announced plans to raise $500 million to invest in overseas property, with as much as two-thirds earmarked for South America’s largest economy. The fund will focus on Brazilian companies tied to both residential and commercial, according to Equity co-founder Gary Garrabrant.

“Our enthusiasm for Brazil could not be higher,” Garrabrant told Bloomberg. “You’ve got this local demand that’s unparalleled.”

Brazilian property portal Brazilian Homes last week joined U.S. giant Zillow in introducing rentals to its site.

“As a result of the growing Brazilian tourism market, we decided to start offering rental properties as part of our Brazilian property portfolio,” senior partner Alexander Wasastjerna said in a press release. “We have many clients who have purchased properties in Brazilian hotspots through our company, and we want to help our clients generate healthy rental returns for their property investment in Brazil.”

Brazilian Homes says the rentals are fully booked through March. “Over 90 percent of our bookings are coming from Brazilian tourists from the bigger cities further south in Brazil, and the rest is from foreign tourists who prefer to rent an apartment rather than booking into a hotel,” Wasastjerna said.

While commercial markets around the world show signs of stabilizing, evidence is mounting that the worst is still ahead for the United States.

Commercial property values in the U.S. are already down more than 40 percent since 2009, according to Moody’s Investor Services. And Goldman Sachs predicts commercial prices could fall another 17 percent through the fourth quarter of next year.