I’ve just been comparing notes with some of our capital markets team who have been out and about with clients here and around the world and two things stand out:
- Firstly, how very different have been the experiences of individuals and countries in the recession and hence how varied are the perspectives they now have on the market.
- But secondly, how deep is the well of money which is targeting cross border investment and is looking in particular towards London and other select areas of Europe
Global Performance in the Recession – Peak to Trough
All sector figures, excluding impact of occupancy changes
Cushman & Wakefield, European Research Group
Europe and North America suffered most economically in the downturn and in terms of yield correction – and when combined with changes in occupancy, values fell as much as 45% in some markets such as the US and parts of the UK – but while not all tenant markets have quite bottomed, rental trends appear somewhat more uniform, underlining that many Asian and Latin American markets are still quite supply led.
While this was one of the most uniform global events in recent economic history – we all suffered to some extent – the degree of misery was different and the recovery is even more incredibly polarised – as we have been reminded recently, with strong numbers coming out of Germany just as the Irish Government has been forced to make yet deeper cuts to balance their books.
With few markets able to claim they are doing well on all of the risk and performance indicators which investors are monitoring, this current polarisation in the market looks likely to continue – or at best to give way to a multi-speed recovery.
However, it is worth noting that most countries can claim to be starting to do better on at least some indicators if not all and building on this, and looking at the increased appetite to do business that we’re seeing in different parts of the world, there is definitely now more than just a twinkle at the end of the tunnel!
European Research Group, London