HONG KONG, Oct. 14, 2011 /PRNewswire-Asia/ -- Cushman & Wakefield, the world's largest privately-held commercial real estate services firm, has released a survey report named "Winning in Growth Cities" on the commercial property markets in the world. The report identifies the largest and fastest-growing cities in terms of commercial real estate investment, the difference in pricing, as well as demand and activity within individual sectors. The report is based on estimates for the year to Q3 2011.
The report reveals that investors show a strong interest in commercial property investment in global major cities. New York tops the list and has recorded the highest amount of investment. Hong Kong ranks fifth with US$1.2 billion invested. The top three on the list are New York, London and Tokyo.
The top 25 cities overall saw investment volumes rise 48% in the year to Q3, marginally ahead of the wider market which saw a 41% gain. As a result, market concentration has increased, with the top 25 commanding a 54% market share compared with 52% in 2010. The office market was the dominant sector, taking a 40% share of the total volume, followed by retail (25%) and industrial (11%).
Hong Kong attracted the most investment in the retail sector, boosted by the US$2.4 billion sale of Festival Walk. The Rhine-Ruhr metropolitan area in Germany and New York follow in second and third position, with Manchester and London in fourth and fifth. Shopping centres were the best performing sub sector with investors eyeing asset management angles. Economic fundamentals in Asia Pacific and South America are expected to remain good. Coupled with the limited availability of quality retail space in many cities and strong demand at the luxury end of the market, this is likely to support further growth.
In Hong Kong, the Chief Executive has unveiled the strategy of developing Kowloon East in his latest Policy Address, in an attempt to create a new business hub and increase the district's competitiveness. Under the plan, office space of 4 million sq. m. can be introduced to the market, with improved transport network and a new cultural district. These measures allow Hong Kong's Grade A office buildings to develop and relieve the shortage of Grade A office space, and thereby increase the value of local commercial property.
Kent Fong, Co-Head of Investment, Senior Director, Investment, Capital Markets, Cushman & Wakefield Hong Kong, said, "with the global economic sentiment turning sour, investment activities will be quiet in 4th Quarter this year. Amid the tight credit, most investors will adopt wait-and-see approach until early 2012."
He further pointed out that risk level in developing markets has been surging with supply glut and rising property prices. That explains why investors have been opting for New York and London because of the currency depreciation and trough of property cycle, apart from risk-aversion. He expected the property prices in both Hong Kong and Singapore will be stable as the leverages are not high.
About Cushman & Wakefield
Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. Founded in 1917, it has 234 offices in 61 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Client Solutions, including integrated real estate strategies for large corporations and property owners, Consulting Services, including business and real estate consulting; and Valuation & Advisory, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at: www.cushmanwakefield.com.
