News
Global office property sales decline 60% in first half
Global office property sales fell 60 per cent to $108 billion (Dh396.69bn) in the first half of 2008 compared to $268.6bn registered in the same period last year, according to a New York-based research firm.
Europe displaced the Americas as the most active region, while sales fell dramatically in both regions from 2007 levels, Real Capital Analytics (RCA) said in its mid-year review.
In contrast and reflecting its rising global strength in all property sectors – Asia Pacific had steady activity with sales comparable to levels in the Americas and Europe.
"Economic uncertainty and debt repricing has placed upward pressure on capitalisation rates worldwide. The Americas are offering investors the most attractive yields, but Europe is edging close to parity. A second quarter rise in Asia Pacific illustrates that no region has been immune from the credit crunch."
Portfolio sales underwent a negative turnaround, dropping 73 per cent year-on-year (yoy) on $18bn in sales as investors, finding debt scarce for large deals, shifted focus to one-off property deals. There had been no significant entity-level office deals so far this year.
A surprise was Japan, where sales more than doubled yoy. Japan vaulted over the United Kingdom, France and Germany to become the second most active country in 2008. It is unclear whether Japan's impressive showing indicates a fundamental shift in investment or simply a concentration of sales at a point in time.
Japan's growth was in sharp contrast to trends in other major economic powers. The US market was off 69 per cent against first half of 2007 with France, the UK and Germany down 57 per cent, 69 per cent, and 80 per cent, RCA said.
Spain's moved from eight position to fifth position, which was fuelled by the sale of Banco Santander's Financial City Headquarters complex just outside Madrid.
In contrast to Europe's malaise, robust activity in Hong Kong (up 86 per cent) and Singapore (up 58 per cent) moved these countries into the top 10 and helped buoy overall Asia Pacific sales for first half.
At the market level, activity in global cities was a mixed bag. Tokyo led as the most active market, with over 90 per cent Japan's $12bn in first half and shouldering aside long-reigning New York City and London.
The once vaunted London office market took a major tumble, with sales off 64 per cent yoy. The hardest hit of the global gateway cities was San Francisco, where sales fell 81 per cent.
Asia pacific outshines
The Asia Pacific region was the brightest for retail property sales in the first half as sales there slipped a negligible two per cent, while they fell 50 per cent in Europe and plunged 71 per cent in the Americas. Total global volume only reached $50bn against $109bn for the first half of 2007.
The deterioration in sales volume increased from first quarter to second quarter in the Americas and Asia. Europe showed relative strength, as sales volume in second quarter was, for the first time, stronger than that of the Americas and Asia Pacific combined. Sales volume began to shrink in the Americas as early as the first quarter of 2007, while the drop in Europe began in second quarter of 2007. Asian retail sales continued their expansion for an additional quarter before turning slightly negative in 2008.
Europe displaced the Americas as the most active region, while sales fell dramatically in both regions from 2007 levels, Real Capital Analytics (RCA) said in its mid-year review.
In contrast and reflecting its rising global strength in all property sectors – Asia Pacific had steady activity with sales comparable to levels in the Americas and Europe.
"Economic uncertainty and debt repricing has placed upward pressure on capitalisation rates worldwide. The Americas are offering investors the most attractive yields, but Europe is edging close to parity. A second quarter rise in Asia Pacific illustrates that no region has been immune from the credit crunch."
Portfolio sales underwent a negative turnaround, dropping 73 per cent year-on-year (yoy) on $18bn in sales as investors, finding debt scarce for large deals, shifted focus to one-off property deals. There had been no significant entity-level office deals so far this year.
A surprise was Japan, where sales more than doubled yoy. Japan vaulted over the United Kingdom, France and Germany to become the second most active country in 2008. It is unclear whether Japan's impressive showing indicates a fundamental shift in investment or simply a concentration of sales at a point in time.
Japan's growth was in sharp contrast to trends in other major economic powers. The US market was off 69 per cent against first half of 2007 with France, the UK and Germany down 57 per cent, 69 per cent, and 80 per cent, RCA said.
Spain's moved from eight position to fifth position, which was fuelled by the sale of Banco Santander's Financial City Headquarters complex just outside Madrid.
In contrast to Europe's malaise, robust activity in Hong Kong (up 86 per cent) and Singapore (up 58 per cent) moved these countries into the top 10 and helped buoy overall Asia Pacific sales for first half.
At the market level, activity in global cities was a mixed bag. Tokyo led as the most active market, with over 90 per cent Japan's $12bn in first half and shouldering aside long-reigning New York City and London.
The once vaunted London office market took a major tumble, with sales off 64 per cent yoy. The hardest hit of the global gateway cities was San Francisco, where sales fell 81 per cent.
Asia pacific outshines
The Asia Pacific region was the brightest for retail property sales in the first half as sales there slipped a negligible two per cent, while they fell 50 per cent in Europe and plunged 71 per cent in the Americas. Total global volume only reached $50bn against $109bn for the first half of 2007.
The deterioration in sales volume increased from first quarter to second quarter in the Americas and Asia. Europe showed relative strength, as sales volume in second quarter was, for the first time, stronger than that of the Americas and Asia Pacific combined. Sales volume began to shrink in the Americas as early as the first quarter of 2007, while the drop in Europe began in second quarter of 2007. Asian retail sales continued their expansion for an additional quarter before turning slightly negative in 2008.