The Global MarketView - Gauging the Recovery
The 3Q 2009 CBRE Global MarketView reports on the economic recovery and its implications for commercial real estate.
• Clearly, a synchronized downturn is not being followed by a synchronized recovery. Regions and countries are experiencing widely divergent trends.
• The recovery is being led by Asia, with Latin America in second place. Europe and North America, together representing about 50% of world GDP, will lag the emerging markets and temper the recovery’s pace.
• Investors are just beginning to look for good deals with quality properties—the most sought-after assets because of their risk profile.
• Pricing for quality assets is showing some uptick in both Asia and Europe, and particularly in London. It is not clear that this activity reflects the “bottom,” but a number of purchases can be called “good buys” by most standards.
• While values are rising in anticipation of recovery and based on opportunities, property market fundamentals are still deteriorating across the globe. The CBRE Global Office Rent Index shows rents falling by about 2%, quarter over quarter. The market is certainly close to “bottom,” and the worst does seem to be behind us.