Asia Pacific is expected to outpace the world economy once again in 2011. Domestic demand will remain strong, with sustained improvements in hiring and incomes. China and India will be the region's star performers. Hong Kong and Singapore will remain the tightest office markets, while pockets of temporary weakness may appear in Shanghai and Mumbai due to the influx of new supply. Better office fundamentals will continue to spur investment activity particularly in the region's financial centers – Hong Kong, Singapore, Shanghai, Tokyo and Sydney.
The recovery is here and is likely to gain momentum as 2011 progresses. The entire region will benefit from stronger growth in the US, but all the major countries in the America's will be in full-fledged economic expansion mode. Healthy employment growth will contribute to declining vacancy in most markets, on average, and lead to a turn up in asking rents in the next 12 to 18 months. We are already seeing this trend take place in some markets.
While opinions are still mixed, Cushman & Wakefield is now more optimistic that a sustained recovery is underway. In all sectors, the days of tenant power will soon be numbered in the prime markets as supply levels erode, but many secondary markets will remain under pressure for some while yet. Even there, however, it will be interesting to see which areas are first to be picked off by either occupiers or investors as prices rise and availability falls in the prime market.