Promising Outlook for Commercial Real Estate Worldwide in 2010
January 17, 2010
Worldwide, 2010 looks promising for commercial real estate investment across most markets, and Asia offers the best opportunities, according to the 16th edition of the LaSalle’s Investment Strategy Annual.
The report says that the free fall in values has stopped in nearly all the major markets it follows and the early stages of restored investor confidence have begun.
Markets across the globe are recovering in very different and surprising ways. LaSalle offered the following information about specific markets:
United Kingdom: While capital values will still increase, a sharp rebound in prices means that the best opportunities have passed, the report says.
Continental Europe: France and Germany are set to see most of the investment activity in 2010. Re-pricing in other countries continues at varying speeds and Central Eastern Europe continues to be paralyzed.
United States: Its recovery is slower because the market has yet to reach bottom. Weak economic fundamentals are expected to push vacancies up and prices down until the second half of 2010.
Asia: The area is expected to offer investors the greatest range of opportunities in 2010 as China and India growing rapidly, and economies that have experienced a contraction in economic output reclaim lost ground by 2010.
LaSalle summarizes that investors in commercial real estate should be cautiously optimistic about the outlook in 2010. However, as a late cycle participant in the general economic recovery, real estate will behave differently from other asset classes.
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From what I’ve read, Asia does seem like a “hot market” for 2010, even though some experts think there could be a bubble brewing in China. Hopefully markets around the world do stabilize, it certainly would help things over here.
Interesting as I have been under the impression here in the US there is still a wave of foreclosures to be faced in commercial real estate.
While the markets vary, those countries utilizing sounder economic principals will likely fare better than others during these somewhat uncertain times.