Global commercial property markets are showing signs of a recovery as emerging markets lead strong rises for the S&P Property and REIT indices in Q2.
The latest Quarterly Global Property & REIT report from Standard & Poor's Index Services found property markets rebounded sharply in Q2. It reports the S&P Global Property Index soared nearly 38% during the period after falling almost 20% in Q1.
Emerging markets powered the rise as the S&P Emerging Market Property Index rocketed over 56% in Q2.
Regionally, the S&P Asia Pacific Property Index took poll position with an increase of almost 43% compared to North America which rose 31% and Europe, up 27%. Each index outperformed its S&P Broad Market Index counterpart.
Emerging market REITs continued to lead the way in Q2, with India and China posting returns of 98% and 76% respectively.
Singapore, with its newly eased credit conditions, posted a gain of over 63% while other developed countries including: Austria, Finland, Greece, Hong Kong, Italy, Japan and Norway rose by over 40%.
The report found the improved performance of property and REIT companies have been driven by declining vacancy rates, access to capital allowing companies to shore up balance sheets, improved liquidity and revived credit flow.
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Traditional drivers are being increasingly challenged by global headwinds and investors must adapt, writes Gary Greenberg, head of emerging markets at Hermes Investment Management.
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