May 7, 2019
Class A industrial assets in primary markets are best positioned for growth in both values and rents over the next 12 months, according to the latest U.S. survey from the Royal Institute of Chartered Surveyors (RICS).
The annual increases in the 3% range forecasted by survey respondents occur against a broader backdrop of “generally solid” sentiment in the real estate market, RICS says.
The outlook for rent growth in prime industrial is marginally better than that for prime office, while valuation growth projections for prime office lag those of prime industrial.
Both asset classes, though, outperform either prime or secondary retail, where expectations call for negative growth over the next 12 months, especially for secondary retail. Multifamily is not included in the quarterly RICS U.S. Commercial Property Monitor surveys.
Generally speaking, according to RICS, “the majority of contributors to the survey (41%) view the market to be in the peak phase of the property cycle.” Accordingly, more than half the respondents in the first-quarter U.S. survey said that properties have become expensive relative to values.
That being the case, U.S. survey respondents ranked behind their counterparts in Germany, France, Japan, Canada and Hong Kong, among other markets, in terms of saying that commercial properties were overpriced.
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