ASIA TO LEAD GLOBAL OFFICE DEVELOPMENT CYCLE

Region Expected to Account for Nearly Two-Thirds of Completions by 2012 The focus of global office development activity has shifted to Asia as the world economy emerges from the severe financial downturn, according to new research from CB Richard Ellis (CBRE) Global Research and Consulting. Only Asia among the four major global regions -- Asia, Western Europe, North America, and the Pacific -- will witness significant growth in office completions in 2010 and 2011, before slowing to a still slightly higher-than-normal level in 2012. This high rate of office development reflects the strong corporate and investor confidence in Asia, excluding Japan. This confidence has emboldened developers in some of the region’s largest office markets to press on towards completing projects which had been delayed or halted briefly during the most severe part of the downturn. Of the 293.2 million sq ft of office space expected to be completed in the leading global office markets between 2010-2012, some 65%, or 190.6 million sq ft, is set to come on stream in Asia, according to CBRE’s new report, entitled “Global Office Development Cycle: Where are we now?”. About 24%, or 69.1 million sq ft is slated for completion in the business hubs of Western Europe; whereas 8%, or 23.1 million sq ft will become available in North America and 4%, or 10.5 million sq ft will be in the pipeline in the Pacific region. “Globally, office markets are strongly cyclical in nature,” said Raymond Torto, Global Chief Economist, CBRE. “The long lead-in time for the construction of city centre office buildings frequently means that peaks in construction completions coincide with downturns in demand. As has been clearly indicated in this special report, the timing of the development cycle has a pronounced effect on the rental cycle, magnifying movements both up and down.” The fact that Asia’s leading economies, ex-Japan, are currently at a more advanced stage within their business cycle compared to their counterparts in North America and Western Europe directly translates to higher rates of new construction in this region relative to the norm established over the past decade. As manifested by office development completions between 2010 and 2012 calculated as a percent of year-end 2009 stock, Asian office development (27.9%) has by now fully resumed after slowing down briefly in the wake of the global economic downturn. Other regions, in contrast, are experiencing either slightly below normal completions, such as the Pacific (7.3%), or relatively scant completions, such as Western Europe (3.7%) and North America (1.2%). “Since the turn of the new millennium the world’s advanced economies have begun to lose their pre-eminent position of holding a majority share in the world’s market activity and the proportionate share held by the world’s emerging economies has soared,” commented Andrew Ness, Executive Director of CBRE Research Asia. “This fact has already begun to impact on how transnational companies position themselves globally, and how and where they place their key personnel and resources to enhance their competitive edge. Within Asia, this has also spurred the growth of indigenous corporate giants, who themselves aspire to achieve transnational status and have growing requirements for office space. This shift in corporate activity is reflected by the way in which the regional focus of office development has changed, especially since the global economy has begun to emerge from the financial downturn.” Analysed by region, the report forecasts that the office development cycle in Asia is likely to be markedly different than that which will be witnessed in the other three regions. Approximately 190.6 million sq ft of office space has already been completed or is scheduled to come on stream in Asia in 2010-2012, the equivalent of approximately 63.5 million sq ft per annum. This surge in development activity will push average completions during this period to a level about 50% higher than the average of 42.2 million sq ft delivered per annum over the past nine years. A series of shocks over the past three years, including the outbreak of the sub-prime crisis in 2007, the global economic downturn in 2008/2009 and the Eurozone debt crisis in spring 2010 led to many office developments in Western Europe being mothballed, as evidenced by the declining trajectory of completions forecast for the 2010-2012 period. Western Europe will witness the completion of just 69.1 million sq ft of new office supply within this timeframe, the equivalent of 23.0 million sq ft per annum and a 30% drop over the average quantum of 32.9 million sq ft per annum delivered over the past nine years. North America, arguably the epicentre of the global economic downturn, will see only 23.1 million sq ft of office space completed within the 2010-2012 period, or less than 8.0 million sq ft per annum, a 70% drop compared with the average of 25.9 million sq ft per annum recorded in the 2001-2009 period. The Pacific, whose office development cycle is buoyed by its strong economic links with Asia, will see 10.5 million sq ft, or about 3.5 million sq ft per annum, the equivalent of a milder drop of about 15% from the average of 4.1 million sq ft per annum recorded during 2001-2009. The report outlines the degree to which office development activity in Asia has resumed and fully supports the International Monetary Fund’s (IMF) prediction that global growth over the next few years will be driven by Asia’s emerging economies, which should prove to be resilient, even given the persistence of financial malaise in many of the world’s advanced economies in the medium to long term. About CB Richard EllisCB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2009 revenue). The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis established an office in Bangkok in 1988, followed by its Phuket office in 2004 and the Samui office in 2007. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities and tenancy management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th. Click for photo release at www.thaipr.net

• ข่าวCB Richard Ellis
• ข่าวo:con
• ข่าวo:eco
• ข่าวen