Markbericht Asien Apr09

The first quarter was challenging for Asia’s real economy and property markets.

Executive Summary

• The Asian economy remained in the doldrums in the first quarter, led by the anemic performance of exports. Nonetheless, China’s economy is showing signs of improvement, thanks to the government’s four trillion yuan (US4 billion) stimulus package.
  
• Although the region’s credit market has yet to completely thaw, bank lending volume rose meaningfully in Japan and China in the first quarter.
  
• Asia’s property markets continue to be lackluster. Investors are remaining on the sidelines due to the correction in rents and upward trend in capitalization rates.
  
• Demand for office space is subdued due to corporate downsizings and reluctance of tenants to commit in light of the economic downturn. Negative absorption will drive up vacancies while rents will face downward pressure going forward.
  
• Retail sales growth in the region has either decelerated or turned negative as a result of frail consumer confidence and belt-tightening among households. Consequently, demand for retail space, especially in prime locations, slowed in the first quarter.