CBRE Global MarketView | February 2010

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Looking Better
by Nick Axford, Andrew Ness, Kevin Stanley, Raymond Wong and Raymond Torto


Briefing Points
The global commercial real estate market is becoming better—slowly.

Summary

• Economies are rebounding and commercial real estate is too, but not with the same gusto. There are pockets of solid recovery in leasing and investment activity, but there are also concerns about the sustainability of these improvements. Of particular note is that investment markets are ahead of leasing markets across all global regions. Yields on prime, core properties have compressed, but positive leasing indicators are not as definitive.

• Although China’s economy and real estate market command most of the headlines, it is the Pacific region that seems best poised to succeed in 2010. Yields have compressed in each property sector, volume is up and our man in Sydney says that the “sweetest spot” in the investment cycle may have already passed.

• Asia, too, had a good 4Q, which saw significant improvements over the first nine months of the year. Most of the activity was in China, Hong Kong and Taiwan, prompting concern about potential overheating.

• Europe also saw investment yields come in ahead of leasing fundamentals, but only for prime properties. Transaction volume was up significantly compared with earlier quarters of 2009, but rents are just stabilizing in some markets.

• In the U.S. we again see cap rates on prime properties coming in a bit, while secondary and tertiary properties and markets see no improvements. Leasing markets are improving at a slower pace.

• 2010 will be better than 2009.

Click here for the report.