Alternative property sectors remained ahead of mainstream assets, although expectations were also lower than before. Data centres recorded the strongest outlook, with rents expected to rise by 3.5% and capital values by 3.3% over the year ahead. Aged care, multifamily residential and life sciences assets were also expected to see limited growth.
“The occupier side of the commercial property market has, to date, shown little visible impact from the increasingly difficult global geopolitical environment, with survey indicators tracking demand levels, availability and rental expectations largely unchanged since late last year,” said Tarrant Parsons (pictured right), head of market research and analysis at RICS.
“However, the negative macroeconomic consequences of the conflict in the Middle East are evident in the investment market, most notably through tighter credit conditions and growing caution around near term capital values. This is weighing on confidence just as the market had begun to display tentative signs of recovery.
“Whether this represents a short-term interruption or the beginning of a more prolonged slowdown will depend on how quickly the current disruption across global energy markets begins to ease.”
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