THE 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.
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.
