The year 2012 started off with high hopes that the challenges faced by the global economy would be overcome and growth would accelerate. Instead, the difficulties intensified and the expected improvement got pushed back.
Nevertheless, the fundamental drivers continue to point to stronger growth. As solutions to the political-economic challenges are implemented and confidence returns, demand will build and lead to a much healthier economic climate.
Even though 2013 will get off to a slow start, Cushman & Wakefield is optimistic that the stage has been set for a significant turn-up late next year and a strong global rebound in 2014 and beyond. Read our Economic Pulse Forecast 2013 for global and regional analysis.
As Sigrid Zialcita, Managing Director, Research , Asia Pacific, explains, “Even though a number of countries will remain in recession through the first half of 2013, modest positive growth is forecast for the region overall. As well, the sluggish “average” of the region will hide some stronger areas of regional and sector growth.
For the office sector, sustained job gains will underpin steady improvement in leasing activity well into 2013, albeit strong increases are less likely. Grade A rents still have room to grow in most cities – with new records likely to be set in Shanghai, Beijing and Jakarta. A soft landing in China will also reinforce a growth slowdown in the region as it has evolved into a vital source of export demand for most Asian economies.
As David Hutchings, Partner and Head of the European Research Group, explains: “Europe’s problems are clearly deep and long lasting, but they are not universal across all markets and, while there is a long road left to travel and plenty of room for unpleasant surprises along the way, the first building blocks of a sustainable solution appear to have been put in place.
As David points out, “If we are right in our reading of the economy, the implications for the property market will be varied, with many occupiers remaining defensive, but some acting or preparing to release pent-up demand as confidence improves.”
Slow But Not Stalled – Stronger Growth On The Horizon
Listen to Maria Sicola, Executive Managing Director, Americas Research, explain why 2013 will be a transition year for the Americas, marked by modest to strong growth. While most of next year will be dominated by economic uncertainty, the underlying health of the regional economies will emerge as the fog lifts later the year, and drives growth higher.
For the real estate sector, 2013 may spell another pause in much of North America, while Central and South America will continue to grow at a healthy pace, but the stage has been set for strong regional growth in 2014 and beyond.
According to Cushman & Wakefield Chief Economist Ken McCarthy, 2013 will get off to a slow start for the global economy, but stability and growth will take hold later in the year as solutions to political-economic problems are implemented. While impacts will differ in each region and in local markets, hear why Ken sees 2013 as being a turning point that will lead to a stronger year in 2014.
This new global report from Corporate Occupier & Investors Services (CIS), Global Research and C&W’s Legal Sector Group focuses on the real estate trends in global legal services and how occupier demand across various markets will impact the sector.