Asia leads globe in new-office construction
Due to widespread downsizing of white-collar companies during the global recession, there has been very little demand for new office buildings worldwide, except in Asia, according to new analysis by a commercial real estate brokerage.
Only Asia among the four major global regions, including Western Europe, North America and Australia, will see significant growth in completion of new office buildings in 2010 and 2011, before slowing to a slightly higher-than-normal level in 2012, according to a CB Richard Ellis report released Monday.
The pace of development reflects strong corporate and investor confidence in Asia, excluding Japan, the report said. This confidence has emboldened developers in some of the region's largest office markets to press on toward completing projects that were delayed or halted briefly during the most severe part of the downturn.
By the middle of 2010, almost all office leasing markets in Asian cities such as Mumbai, Shanghai and Singapore has already bottomed out and were stabilizing, or in some cases, were in the midst of the early phase of rebounding.
Demand for office space in the U.S. remains weak because businesses have yet to begin hiring. Western European markets show signs of leveling out, but Asia (minus Japan) is where growth is still the rule.
“Since the turn of the new millennium, the world’s advanced economies have begun to lose their preeminent position of holding a majority share in the world’s markets, and the proportionate share held by the world’s emerging economies has soared,” the report said.
-- Roger Vincent
Photo: The skyline of Mumbai, India. Credit: Danish Siddiqui / Reuters