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2008 Commercial Real Estate Market Information for The Asia Pacific Region, Canada, Europe, Latin America and the Caribbean
NAI Global Market Report Highlights
NAI Global has just published its 2008 Commercial Real Estate Global Market Report. This 148-page report, compiled by NAI Global members around the world, is a unique review and summary of global commercial real estate activities during the past year. It provides comprehensive market data, as well as geographical area and economic overviews for 213 primary, secondary and tertiary property markets worldwide.This report provides a wealth of global commercial real estate market intelligence that will be used by corporations, institutions, developers, real estate investors, lenders, property owners and real estate brokers throughout the U. S. the Asia Pacific Region, Canada, Europe, the Middle East, Africa, Latin America and the Caribbean.
Asia-Pacific Region: Manufacturing continues to be focused on China, but as prices for real estate, utilities and labor rise, companies are pursuing a “China plus one” approach, where they locate a facility in China and a second facility in another low cost country in Asia. India has 1.1 billion people and cheaper production costs. China and India are attracting a lot of attention for joint venture development opportunities with local developers. However, investors should tread carefully. Most local developers in these markets do not have the experience in dealing with Western investors. Therefore, the time and effort invested in each project will be significantly greater than what Western investors generally expect.
Canada: Foreign investors are disrupting Canadian owners’ traditional hold on the market. Canada’s real estate ownership remains largely concentrated in the hands of a dozen institutions and trusts. However, Europeans and American investors such as Blackstone Group and ProLogis have made significant investments in the market.
Europe: France and Germany are experiencing economic expansion fed by historic levels of global growth. Property markets across the continent have been strong, although some shifts may occur as a result of overreaction to U.S. sub-prime concerns. The most expensive office space in the world can be found in London’s West End, where peak rents in Mayfair top $225 per square foot. Rental increases also have been particularly strong in Budapest (+17.5%), Madrid (+20%), Moscow (+25%), Oslo (+65%), Paris (+10%) and Warsaw (+30%). Copenhagen, London, Madrid, Moscow, Paris, Düsseldorf, Frankfurt and Stockholm all claim vacancy rates of 5% or less. Retail is particularly strong in Budapest, where rents have increased 25%, and in Moscow, where rents are up 45%.
Latin America & the Caribbean: A long-awaited period of sustained economic growth is finally occurring in much of Latin America. After decades of failed economic policies and dubious politics, much of the region is slowly entering the realm of stable and productive economies. Brazil is now awash with capital for Class A office, industrial and retail developments, as well as speculative acquisitions. Lease rates for all product types have increased 15-20% due to heightened demand and lack of inventory. Colombia may be the region’s best-kept secret. Although growth has slowed from 6.8% in 2006 to a projected 4.9% for 2008, inflation has been tamed to 4%. Real estate development activity is strong, but supply lags demand, particularly for higher-end office, retail and industrial properties. Developers can’t keep pace with demand in Mexico either, where all property types have single-digit vacancy rates. Prices for well-located land parcels are expected to rise as much as 15% in 2008.
About NAI Global:
NAI Global is one of the leading commercial real estate services providers worldwide. Headquartered in Princeton, New Jersey, NAI Global manages a network of 8,000 commercial real estate professionals and 375 offices in over 55 countries, and completes over $45 billion in annual transaction volume. Since 1978, NAI Global clients have built their businesses on the power of NAI’s expanding network. NAI Global’s extensive services include corporate real estate services, brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain consulting and related advisory services. To learn more, visit www.naiglobal.com.