The latest RICS Global Commercial Property Survey suggests that the weaker global economic climate in the final three months of last year has adversely affected confidence in the commercial real estate sector. This has been reflected in a downgrading of expectations in an increasing number of countries around the world.

However, in Hong Kong, the picture appears to be more stable as both the tenants and investment markets remained little changed. Demand from tenants and available space both look to be broadly stable. Consequently, the rent expectations appear to have levelled off following two years of rise. Capital value expectations for the first quarter have also reached a stable level after rising consistently since 2009. However investment activity is projected to slip back a little in the early part of 2012 after recent strong increases.

In mainland China, where policy has become less accommodative and concerns grow over the residential sector, occupier demand in the commercial sphere continues to rise, though the pace has tempered from the third quarter. The available space net balance remained positive, but fell closer to the neutral reading of zero indicating "no change". Unsurprisingly, rental expectations are also set to carry on increasing, but at a lesser rate than previously.

Looking at the local commercial property market, Kenneth Kwan, chairman of RICS Hong Kong, commented," The net balance reading for both occupier demand and available space point to a broadly stable picture in the fourth quarter. Rents are also expected to stabilise going into 2012, with the net balance shifting down. Both investment enquiries and capital value expectations turned marginally negative in the fourth quarter following 18 months of gains. Both are seemingly stabilising at a high level."

By way of contrast, the outlook for rents is predictably still quite negative across most of Europe with the noticeable exception of Germany. The prospect of an extended period of minimal growth, if not a retreat back into outright recession, is clearly weighing heavily on the sector in the wake of the ongoing turmoil relating to the sovereign debt crisis.

Sentiment in the occupier market has also turned a little more negative in both Singapore and India but that follows strong increases in rents through 2010 and the first half of 2011.