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«Asia Property Snapshot. Key points include:
Asia's major economies are showing slowdown in economic activity.
Many Asian governments have already introduced stimulus programmes and are preparing more in 2009. The main focus will be on infrastructure projects and on boosting consumer spending.
Stimulus measures will take time to impact positively on the real economy and thus the short-term outlook will remain bleak for most Asian economies in 2009. A gradual economic recovery is expected in 2010, with growth rates well above those projected for the US and Europe.
In the property market, occupier demand has been falling across all commercial property sectors. Investment volumes dropped substantially and yields softened (a blended average of 28 bps outward yield shift in 2008).
Average prime total returnsof mature markets such as in Japan, Hong Kong and Singapore dropped the most by -11% in 2008, from 36% in 2007.
Semi-developed markets (South Korea, Taiwan and Malaysia) escaped a downturn in 2008 with rental and capital values both recording about 6.5% growth in 2008.
Emerging markets like China and India experienced further declines in rents and capital values, averaging 6% and 8% respectively in Q4 last year.
Investment activities are likely to be weak for most of 2009 as rents and capital values still have room to fall before they become affordable by end-users and attractive to investors.
The projected average annualised "All property" total returns (unleveraged) during 2009-13 for mature, semi-developed and emerging markets are 2%, 6% and 10% respectively». (CS della Società)
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