The Euro area has finally emerged from recession, although the recovery remains fragile. However, the recovery in the US, which had been gaining momentum, now faces the uncertainty of a partial shutdown of the federal government.
Parts of Asia Pacific have seen prospects weaken in the first half of 2013, most notably in China and India. Concerns over the possible tapering of US Federal Reserve bond purchases has led to significant capital outflows from emerging markets, although the US Federal Reserve’s decision to delay the process has alleviated these to some extent.
From a real estate investor’s perspective, the greater stability being seen in Europe is, arguably, the most important change on a year ago. Indeed, both the EU27 and the Euro area recorded GDP growth of 0.3% in Q2. While a number of countries are still in recession–including Spain, Italy and Greece–the pace of decline has eased.
Despite the improving economic news, the recovery in global occupier markets has so far been patchy. While take-up in key US cities has accelerated in 2013, slower growth and large development pipelines have led to increased caution in parts of Central Europe and Asia Pacific.
In Europe, the balance of power remains with occupiers, although the better economic news is gradually feeding through to increased activity and vacancy rates are generally on a downward trend. Across the sectors, TMT companies look set to be a major driver of growth for the foreseeable future, most notably in cities such as New York, London, Hong Kong and Singapore.
(This article features excerpts from the full report – please download it here)