DTZ's flagship Money into Property report - now in its 36th year - says the worst of the global real estate slump is over and forecasts that global invested commercial stock assets will grow 5 per cent in 2010 to US$11.4 trillion.
Global invested commercial stock fell 6 per cent in 2009.
The report, released in Singapore yesterday, is also bullish on China.
It forecasts that China will overtake Japan and the UK to become the second-largest property market after the US by end-2011. China was fourth in 2009.
Indeed, DTZ is bullish about the entire Asia-Pacific region. The property firm is forecasting a 12 per cent increase in Asia-Pacific commercial invested stock this year.
'The Asia-Pacific continued its growth in invested stock due to the developing nature of the property market in the region, led by China and India, combined with the rapid reaction of governments to the global financial crisis,' said David Green-Morgan, head of DTZ Research for the Asia-Pacific.
Despite the slowdown in bank lending in China, he expects Asia-Pacific transaction volumes to increase this year as investors look to take advantage of improving economic conditions and strong intra-regional trade.
Based on its forecasts, DTZ recommends that investors become proactive buyers, as a large number of Asia-Pacific markets - including China and India - offer attractive investment opportunities for the next two years.
According to DTZ, 151 out of 172 markets (88 per cent) worldwide now offer buying opportunities as prices are at or below fair value. Last year, the firm recommended only one market - the London City office market.
'What a difference a year makes,' said Tony McGough, global head of forecasting and strategy research at DTZ.
'This time last year we recommended investors to wait on the sidelines as almost all commercial property markets worldwide were traded at prices above their fair value. This year, following a marked re-pricing of the market, our research shows there has seldom been a better time to invest in prime commercial real estate,' he said.
In the Asia-Pacific, 84 per cent of the markets covered by DTZ are currently trading at or below fair value - with the office and retail markets looking particularly attractive.
For Singapore, DTZ said the retail and industrial markets are good bets but it is still 'cold' on the office sector on concerns of future oversupply.
But the firm's Singapore office recently raised its forecast for office rentals after the economy put up a strong showing in the first quarter of 2010.
Just a few months ago DTZ had expected prime Raffles Place office rents to fall 10-15 per cent in 2010 - but it now expects a marginal increase of one per cent for the year.
Source: Business Times, 14 May 2010
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