Economic pain is spreading to a growing number of commercial real estate markets around the world, concludes a new assessment by CB Richard Ellis Inc. The report\u2019s title, \u201cThe Quarter the Global Economy Stalled,\u201d suggests that the end of 2008 was a turning point. \u201cGDP reports or estimates for the world\u2019s major economies are all down, and most nations are reporting declining industrial production and falling exports, the latter being quite severe in the largest exporting nations,\u201d concludes the analysis, which was prepared by an international five-member team including Raymond Torto, Nick Axford, Andrew Ness, Kevin Stanley and Raymond Wong. The authors contend that the slowdown is rapidly filtering through leasing and investment sales in a wide range of property types. CBRE\u2019s office rent index for European Union nations dropped 2 percent. Rents declined significantly in London, Madrid, Paris, Frankfurt and some Scandinavian markets. CBRE also cited estimates by Real Capital Analytics Inc. that investment sales volume dropped by about half in Western Europe last year. A projected 1 percent to 3 percent slide in GDP this year will most likely further weaken conditions in the Western Europe. In Asia, recession has taken hold in several powerful economies, including Singapore, Japan, Hong Kong, South Korea and Taiwan. \u201cMoving into 2009, the Asian office market has now entered into a broad-based downward cycle,\u201d the economists state. \u201cAs demand for office space has subsided, further significant, unavoidable corrections in the office market are forecast throughout the economic downtown.\u201d During the fourth quarter, vacancy rose in 14 of 17 Asian markets tracked by CBRE. Office vacancy rose 334 basis points from the fourth quarter of 2007 to the fourth quarter of 2008. This year, office rents in Asia face pressure from two directions. The contracting financial services sector is slowing demand at the same time as major projects are boosting office inventory in financial hubs like Hong Kong, Singapore, Shanghai, New Delhi and Mumbai. Even though Japanese banks have relatively little exposure to U.S. mortgage assets, Japan is not escaping the global pinch. Office vacancy in Tokyo\u2019s central five wards district reached 3.2 percent by the end of 2008, an 80-basis-point increase from 2007. And vacancy for Class A office buildings in Tokyo reached 3.5 percent, the highest rate in four years. By comparison, overall office vacancy rates in the U.S. increased 40 basis points to 14 percent during the fourth quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"
Economic pain is spreading to a growing number of commercial real estate markets around the world, concludes a new assessment by CB Richard Ellis Inc. The report\u2019s title, \u201cThe Quarter the Global Economy Stalled,\u201d suggests that the end of 2008 was a turning point. \u201cGDP reports or estimates for the world\u2019s major economies are all…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1003941868","post","type-post","status-publish","format-standard","hentry","category-regions"],"acf":[],"yoast_head":"\n