RICS Monitor: CRE Continues to Adjust to Prolonged Monetary Tightening  

Tarrant Parsons remains cautious on the outlook for the first half of 2024. Image courtesy of RICS

Commercial real estate sentiment across the globe has remained largely unchanged, according to the third quarter Global Commercial Property Monitor survey released by the Royal Institution of Chartered Surveyors in London. The general tone of the results in most parts of the world—for both occupiers and investors—remains quite downbeat, which is not surprising considering the scale in monetary tightening we’ve seen from many central banks, according to Senior Economist Tarrant Parsons.

The gap between the best- and worst-performing regions has widened during the third quarter of 2023. The Middle East and Africa continues to outperform, while the situation in Europe has further worsened. In this episode of the RICS Monitor series, Parsons expands on the divergence across Asia-Pacific markets, the pessimistic outlook for Europe, the solid market backdrop in the Middle East and Africa, as well as the differences between the U.S. and Canada when it comes to CRE sentiment. The economist also touches on the war in the Gaza Strip and the potential risks for the global economy it brings.

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“The final quarter of this year and maybe the early part of next year will look a lot like what we’ve experienced throughout much of 2023…Overall, I’m still quite cautious on the outlook for the first half of next year,” Parsons noted.

Here’s what else he talked about with Commercial Property Executive Senior Editor Laura Calugar:

• The general sentiment among CRE occupiers and investors across the globe (0:52)
• Regional variations (01:57)
• The office picture (3:18)
• Commercial construction (5:04)
• The rise of alternative assets (6:19)
• The mixed picture stemming from the survey for Asia-Pacific (7:58)
• Europe’s lackluster performance (9:30)
• Solid market backdrop in the Middle East and Africa (11:03) 
• The potential impact of the war in the Gaza Strip (12:55)
• CRE sentiment across the U.S. and Canada (14:06)
• What to expect going forward (15:52)

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