Prospects for properties in most developed markets may have turned negative for the first time in four years as the world credit crunch begins to take effect, but tenant demand is still rising in emerging markets. So says a study by the United Kingdombased Royal Institution of Chartered Surveyors (RICS).

Its Global Commercial Property Survey for the first quarter of this year covering office, retail and industrial properties painted a bleak picture for Australasia, North America and developed Asia, with commercial construction weakening and capital values falling at almost double the pace of Western Europe.

In contrast, RICS found that Africa and the Middle East are still booming and will continue to buck the trend with commercial projects in places such as Dubai and Doha staying robust.

Tenant demand is also strong in emerging European markets, it said, albeit on a more muted note as multinational corporations come to terms with expansion during tougher economic times while investors seem less confident of the potential of sustained high returns.

RICS senior economist Oliver Gilmartin said what started in the developed world has spilt over to lower markets, causing yields in some emerging European cities to be on par with their developed brethrens.

Given the situation, he said it’s not surprising investors previously bullish on budding prospects have turned cautious as on a relative valuation basis, their risk-to-return levels have diminished.

On a brighter note, Gilmartin said the worst may be over for the Western European investment market which appears to be leading the correction in global property.