Sizing up the Emerging Markets: Update 2010

Total market size and GDP are not meaningful metrics when it comes to estimating the potential for institutional-quality commercial real estate in emerging countries.

Executive Summary

• For commercial real estate investors, the best metrics to evaluate an emerging market are not total population and GDP, but the size and economic output of the consumer class, which is the segment of the
• The size and productivity of the consumer class in emerging nations is set to grow at a much higher rate than the overall economy over the next
  decade. The consumer class today encompasses 389 million people, or 10% of the population of emerging nations. It is projected to grow annually by 8.3% and total 865 million (20% of the population) by 2020.
• The consumer class produces a disproportionate share of GDP in emerging nations, a trend that will intensify over time. The class produces 46% of GDP today, a level that will rise to 60% by 2020. The absolute amount of GDP produced by the consumer class in emerging countries is estimated to be $7.6 trillion in 2010, and will grow at an annual rate of 14.5% to $29.3 trillion in 2020.
• The consumer class is much wealthier than the general population in emerging economies. In our universe of emerging countries, the consumer class produces $19,441 per capita of GDP, roughly three times the national average of $6,582.

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  Sizing up the Emerging Markets: Update 2010
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