Commercial Property: Global Influence?

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Things are picking up within the US EconomyTHE LAST quarter of 2011 saw a definite improvement in the US economy — with consumer spending up, and companies finally replenishing their inventories.

GDP increased by an annualised 3%, with improved sales for durable goods and new homes.

Petrol prices have been cheaper, since mid-2011; and the US jobless rate was the lowest in nearly 3 years.

Therefore, with improved employment figures, consumers have felt more comfortable spending — which represents around 70% of US economic activity.

And despite the European turmoil, the German economy has remained resilient — also growing by 3% over the past 12 months.

What does this mean for Commercial property?

In Australia, Offices remain the preferred asset class for performance during 2012; followed by retirement property.

The Property Counsel of Australia/ANZ Industry Confidence Survey

However, retail property was expected to be a negative performer, after decades of strong rental price.

In contrast the PCA/ANZ survey found:

The office and industrial markets are particularly well placed, as reflected by the positive net balance of capital growth expectations for … the sectors.

According to Jones Lang LaSalle, last year saw $US400 billion in direct commercial property deals worldwide — which reflected an increase of 25% on 2010.

Bottom Line: Australia’s share of those deals was $6.5 billion in Office towers during last year — with 28% of those purchases being made by overseas buyers.

And this trend is expected to continue strongly during 2012, and beyond.

 

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