Skip to content

News & opinion

28 OCT 2021

Global commercial property sentiment improves for fifth consecutive quarter

Real estate professionals across the globe highlight a steady recovery, with growing investor demand and improving occupier trends edging up headline sentiment in Q3. With signs of recovery in most regions, the strongest improvements are seen in Middle East and Africa, followed by Europe and the Americas.

With macro recovery continuing to build, 42% of the respondents view the real estate sector as in an upturn phase, showing a significant shift in sentiment compared to the same period in 2019, when 70% of respondents felt the real estate market was in a downturn or at the floor. This optimism could be in part due to the increasing demand from tenants in markets seeing a rise in return to the office or because of the continued strong demand for industrial/logistics spaces, further underpinning the rise of occupier activity.

Find out more about what is driving the improvements in real estate markets in each region covered:


With tenant demand in the UK for offices rising for the first time since before the pandemic, almost two-thirds of the respondents believe the market is in an upturn phase, with 7% more respondents than last quarter citing an increase in demand. However industrial property/real estate continues to attract the strongest pickup in demand at +56% in net balance. This quarter, the Q3 RICS UK Commercial Property Monitor also records the least negative reading for the retail sector since 2018, albeit respondents still report a decline in demand for retail units.

The UK commercial market also experienced a pick-up in investor demand this quarter, with 19% of respondents reporting a rise in enquiries.

Tarrant Parsons, RICS Economist: “The recovery across the UK commercial property market appears to be gradually gaining traction, with headline metrics on demand moving a little further into positive territory during Q3. Supporting this, there seems to be some green shoots emerging across the office sector, with interest from both occupiers and investors rising slightly over the quarter. Nevertheless, this latest improvement needs to be viewed in the correct context, as it follows a particularly difficult period for the sector since the start of the pandemic. As it stands, the outlook for capital values over the year ahead is positive across prime office markets, with expectations being upgraded in the latest survey feedback. Away from the office sector, industrials are still anticipated to deliver the strongest capital value appreciation by some margin. Meanwhile, the backdrop remains challenging for retail, even if a significant degree of negativity has diminished compared with recent quarters.”

Find out more in the latest UK report


In Q3 2021, demand for commercial property across the office and industrial sector increased for Europe, with the Commercial Property Sentiment Index improving in 19 of the 20 European nations covered by the monitor.

Industrials, multifamily and data centres lead the way for rental growth, and similar to the UK, tenant demand has moved to positive territory across the office sector for the first time since before the pandemic.

Middle East and Africa

Steadier demand comes through this quarter for both the occupier and investor sides, which respondents note as a more encouraging development in comparison to the steep falls reported through most of the pandemic period.

Pulling this optimistic picture up are strengthening capital value expectations, with growth expected in the industrial sector followed by offices and retail properties, particularly in Saudi Arabia, UAE and Turkey. Taking the lead in sector growth however are data centres, which carry expectations for the sharpest rises in rents and capital values over the next year. Conditions however do remain challenging for South Africa and Oman, where demand continues to fall across multiple sectors.

North America

Forward looking indicators for North America show further improvement this quarter with contributors to the survey highlighting an increase in capital value and rental growth. This was particularly the case in the prime industrial sector, which also saw an increase in occupier demand, now at +64% and investor enquiries at +60% in net balance terms.

Interestingly, respondents in Canada also anticipate capital value growth for prime retail assets, moving that into positive territory for the first time since Q4 2019.

Ann Gray, President-Elect, RICS: “The latest survey feedback in North America shows cautious optimism—and amid the pandemic and economic recovery, that is highly encouraging. While many questions remain for investors and occupiers alike, including the need for more pricing clarity, there is an increasing velocity of leasing, capital and investment activity driving the market forward, though with the understanding that the landscape today is a far different one with regard to sustainability and consumer demands than the one in Q1 2019. The real estate market overall is seeing opportunities to create more resilience both in terms of the environment and the market.”


Compared to the other regions, APAC projected a more subdued picture this quarter as macro-concerns in some countries across the region linked to COVID related restrictions impact activity. However, despite wider concerns, the Occupier Sentiment Index did improve slightly, pointing to a more stable picture ahead, with -12 reading posted compared to -17 in Q2, with industrial property remaining in demand. Some parts of Asia-Pacific also projected strong returns on investment over the next year for prime industrial, data centres, aged care facilities and multi-family.