Annual capital appreciation is expected to slow down by 4% in 2016. While Sydney and Tokyo top the performance ranks in Asia Pacific, Los Angeles, Boston, Chicago and San Francisco are projected to outperform in America.
Drastic slowdown in the office property sale volumes! Yes, according to the latest reports from a renowned property management firm, all the regions across the globe are witnessing a slowdown in the office property sale volumes when compared to the same period previous year (2015). The report shows that the speed of decline has accelerated since the last quarter of 2015. The overall activity across the globe in the first three months of 2016 is totalled up to US$133 billion, which is about 14% lower when compared to the activity in the year 2015. It’s also termed to be the weakest start for the year since 2013.
Detailed Report Analysis
This makes it clear that the emerging markets in most of the regions have witnessed lower sale volumes. The volatility levels and the risk aversion seen in the first few weeks of 2016 have made the results of the first quarter look weak. However the recovery has been quite rapid and the equity markets are back to the levels of November 2015 while the credit spreads have narrowed again.
However, most of the major office markets have remained stable when it comes to yield. But what’s to be worried about is the direction of travel is still downwards. The yield across 21 prime office space markets is compressed to 4.8%. Europe has also registered the compression of yield in most of the markets including Stockholm, Madrid, Brussels and Milan.
The capital value appreciation on major assets across 26 markets has held broadly steady at around 8.7% year on year. The reports have shown particularly strong capital appreciation over the past 12 months in Stockholm, Sydney, Dubai, Tokyo and Los Angeles.
This being the current state of commercial office space market, many commercial real estate experts still opine that the year is going the perform well in the coming quarters, as lots of office spaces are under construction, and are expected to be completed soon, which definitely adds up to the office property sale volume.
Commercial Real Estate to Be the Best Bet for Investors in India
Experts say that commercial real estate is definitely a best bet for the investors, as the assets seem to be available at the attractive valuations with the background of falling interest rates.Bangalore Realtors Don’t seem to be Happy after the Rise in Guidance Values
Bengaluru is still a great place for those who would want to invest on real estate. But state government should consider taking necessary steps to generate revenue instead of increasing the property tax percentage.Private Equity Players Being Very Optimistic Over Commercial Space
Office space was absorbed in the year 2015, which was termed to be the highest absorption, with Bengaluru leading the way followed by Delhi NCR.