The world's major commercial real estate markets have been in recovery mode since the crisis of 2008/2009, with 2011 having shown the strongest evidence of an upswing so far.
A Measured Recovery
The world's major commercial real estate markets have been in recovery mode since the crisis of 2008/2009, with 2011 having shown the strongest evidence of an upswing so far. As we move through 2012 nonetheless, first quarter market data suggests a slowing in forward momentum, with investment and leasing volumes down by about one-fifth on a year ago. We believe this is a lagged market response to the escalation of the euro crisis during the second half of 2011 and, as such, it is likely to be a temporary slowdown. Given the more positive outlook for the global economy, the significant weight of capital targeting commercial real estate and the strong pipeline of deals, we fully expect the global real estate markets to resume their steady, measured recovery path during the remainder of 2012.
- India's economic growth is expected to ease to just below 7%, a result of weakening exports and investment spending, while the country's lack of progress on structural reform remains a persistent downside.
- Despite RBI initiating cuts in term rates to improve liquidity, the ongoing 'policy paralysis', if continued, will slow monetary easing, possibly stalling any recovery. High oil prices also remain a dampener for dynamic but oil-intense economies such as China and India most vulnerable.
- Technology occupiers continue to expand in India, albeit at a slower pace. While large IT-ITES corporations are cautious in expanding their offshore centres in India, some traction has been seen from Level II IT-ITES firms.
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