Despite recent positive news regarding the UK commercial property market, recent research from multinational real estate company, CB Richard Ellis (CBRE), has asserted that the European commercial property market, is lagging behind its Asian counterpart.
According to reports from CBRE, the value of business and office space in Asia, is increasing by roughly 20 per cent every year. To attempt to compare this to the UK, Investment Property Databank, revealed recently that during the month of May 2011, the average value of British commercial property rose by just 0.1 per cent.
Kevin Stanley, executive director of global research and consulting at CB Richard Ellis, commented: ‘It’s a value indication of where the various markets are doing in the recovery. Clearly Asia is surging ahead.’
This unbalanced growth is not good news for the commercial property market in Europe and indeed the UK.
A senior executive at global estate agents, Savills PLC, has forecast that commercial property investors in Europe, are becoming more and more interested in investing in the Asian property market. This in turn, will take money out of the European market.
Speaking at the Reuters Global Real Estate and Infrastructure Summit, head of the Savills PLC, investment management business in the Asia-Pacific region Steffan Wolf, said: ‘The focus has changed substantially in the past 12-15 months. A lot more people are prepared to look more intently at Asia, from North Asia to Australia, including India.’
Wolf, continued to state that over the course of the next five years, European investment into property outside of Europe is ‘going to increase significantly.’ Adding, ‘it doesn’t make sense to buy one property in one market. They want to get some scale out of managing properties. They also want to de-risk themselves by owning not just one property but two or three.’
Wolf, went on to advise would be investors to consider commercial property in Hong Kong and Shanghai. Saying, ‘If you can get comfortable with China then Shanghai and Beijing, for commercial properties, is something a long-term investor should not avoid.’
