Global commercial property has been cited by one industry expert as one component of a diversified investment portfolio that should not be overlooked. David Paine, head of real estate at Standard Life Investments, explained that this asset class "is likely to remain resilient, despite the global economic slowdown". He also noted that property investments are largely considered to deliver a "secure and sustainable yield" when compared to other options.
Mr Paine highlighted the performance of Asian markets, where buoyant economies are expected to result in strong future demand from tenants for high-quality premises. Meanwhile, he pointed out that some western office markets - most notably London and Paris - are performing well, due to a lack of supply of prime properties. However, he acknowledged that this is not the case elsewhere, with US real estate being pegged back by slow economic growth in the country.
The National Association of Realtors (NAR) warned last month that commercial property sectors in the US are likely to experience "a slower recovery" due to the nation's weak economy. The NAR is predicting a marginal decrease in vacancy rates across all areas of commercial real estate, while rents in the industrial and retail markets are expected to fall slightly by the end of this year.
- Friday 02 September 2011