Real Estate & Construction Industry - 27 February 2012
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Real Estate & Construction Industry 27 February 2012
Presentation Plan
Global Commercial Real Estate Investments
Global Residential Market Trends
Global Office Market Trends
© 2012 Grant Thornton International Ltd. All rights reserved.Global commercial direct real estate investment totalled USD
411 billion in 2011 an increase of 28% over 2010
Commercial real estate projects continues to attract capital from investors with investments seen in cross-border as well. The 2012
investment levels are projected to match 2011 levels although euro-zone crisis is expected to have a negative impact on global
investments.
Direct Commercial Real Estate Investment, 2005 – 2012(E)
350 350
2005 2006 2007 2008
300 300 Americas EMEA Asia Pacific
2009 2010 2011 2012
250 250
200 200
150 150
100 100
50 50
0 0
Americas EMEA Asia Pacific 2005 2006 2007 2008 2009 2010 2011 2012
• The Americas region investments volumes were up about 60% in 2011 over 2010.
• EMEA region was up 20% in 2011 over 2010.
• The Asia-Pacific region investment levels remained same in 2010 and 2011
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – LinkInvestments in Asian market remain stable while European
region exceeds expectations. US market sees maximum
investment
All figures in USD billion 46,4 164,8
43 154,8
37,2 37,4 137,7
97,4
90,9
Q3 2011 85,4 FY 2010
21,7 22,4
Q4 2011 FY 2011
Americas EMEA Asia Pacific Americas EMEA Asia Pacific
34,1
32 Q3 2010 34,1
32,3
Q4 2011
Q4 2010
Q4 2011
15
12,7 12,6 12,6
9,3 8,9 8,2 9,3
7,2 7,5 8,2 7
5,5 5 4,8 3,9 5 4,3 4 3,93,9
3 2,8 4 2 2,5 3,3
1,8 1,92,5 2,41,8
US UK France Germany China Australia Japan Russia Canada US UK France Germany China Australia Japan Russia Canada
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – LinkThe US rental apartment market continues to be strong and
remains in favour with investors; Europe and Asian market to
witness slow residential growth
Residential Market Trends
Americas
• The US apartment vacancy rate declined by 100 basis points through the first three quarters of 2011.
• The vacancies are projected to fall further to under 5% in 2012 as the employment growth improves.
• Rents in 2012 are expected to have steady growth with modest acceleration in H1 2012.
Europe
• In most of the European countries price fall in residential property will be of about 2-6% per year. However home prices in Germany
and France will rise strongly to about 7% and 8% respectively.
• Prices in Spain are expected to fall down 8% per year while in Ireland the decline will be even more at 14% per year.
Asia
• Residential real estate sale slowed further across Asia in 2011, with fewer new projects.
• Shanghai and Singapore both experienced negative growth, although Manila and Jakarta remained unaffected.
• Growth of 3.8% and 2.8% seen in Jakarta and Beijing respectively due to ongoing corporate expansion.
• In the Middle-Eastern region, the residential market in Dubai is expected to see mixed performance in 2012.
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – LinkGlobal office leasing volume remains resilient; Demand
continues to be strong in China, India, Brazil, the CEE* region,
Germany, the Nordics, Canada and Australia
Global Office Net Absorption 2011
Asia Pacific:
• For the entire year 2011, net absorption in Asia-
Pacific increased by 20% as compared to 2010.
However in Q4 2011 the leasing volume was down
due to decreased business activity.
• For 2012, it is expected that the leasing demand
will weaken due to slower corporate hiring.
Europe:
• In 2011, net absorption in Europe increased by 5%
as compared to 2010.
• In 2012, it is expected that the overall leasing
volumes in Europe will be similar to 2011 levels.
The US:
• The office sector in the US posted 7 consecutive
gains with the last 2 quarters showing maximum
rate of increase.
• In Q4 2011, a total of 10.6 million square feet of
space was absorbed.
• The occupancy gains have been mainly from the
technology and energy sector.
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – Link * Central & Eastern EuropeGlobal office vacancy rates continue to decline across all the
three regions, with further falls expected in 2012
Office Vacancy Rates - Major Markets Q4 2011
Asia Pacific:
• Across the Asia-Pacific mixed performance was
seen in vacancy levels.
• The occupancy rates across North Asia (Japan and
South Korea) improved due to affordable office
rents.
• Vacancy rates increased marginally in Hong Kong
and Singapore.
Europe:
• Due to increase in net absorption rate, the
European office vacancy rate declined to 9.9%.
• It is projected that European vacancy rate will fall
further in 2012.
• Moreover, uncertain business conditions will result
in postponements in expansion.
Americas:
• The total vacancy rate across the US dipped to
16.7%, lowest since Q2 2009.
• In Brazil, the overall demand for office space
remains strong.
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – LinkDuring Q4 2011, office rental growth remained slow in some
of the major regions
Office Rental Trends
Asia Pacific:
• In most of the regions across Asia Pacific the office
rental growth slowed in 2011.
• In Hong Kong, the rates declined for the second
consecutive quarter. Singapore also saw decline in
rate for first time since Q1 2010.
Europe:
• In Europe the office rents mostly remained
unchanged in Q4 2011.
• However it is expected that rental will increase in
2012 due to shortage of office space in key
regions.
The US:
• Office rents in the US is expected to increase in
2012 with the recovery in economy.
• Technology, energy and healthcare industry is
expected to drive the majority of growth.
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – LinkAccording to JLL*, from 2012 to 2014 global office real estate
industry will shift in favour of landlords from tenants
Global Office Market Conditions Matrix
Americas EMEA APAC
City 2012 2013 2014 City 2012 2013 2014 City 2012 2013 2014
Chicago Brussels Beijing
Los Hong
Frankfurt
Angeles Kong
New York London Mumbai
Toronto Madrid Singapore
Mexico
Paris Sydney
City
Sao Paulo Dubai Tokyo
Tenant Favourable Neutral Market Landlord Favourable
Sources
© 2012 Grant Thornton International Ltd. All rights reserved. 1 – Link * JLL – Jones Lang LaSALLEEvalueserve Disclaimer The information contained herein has been obtained from sources believed to be reliable. Evalueserve disclaims all warranties as to the accuracy, completeness or adequacy of such information. Evalueserve shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. © 2012 Grant Thornton International Ltd. All rights reserved.
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