“The real estate world continues to be split, broadly peaking, between the emerging and developed economies,” said RICS chief economist Simon Rubinsohn. “Strong growth in many of the former, including the likes of Brazil, Hong Kong and India, is continuing to boost demand for new space from occupiers as well as encouraging investment activity.”
Commercial real estate in emerging economies outperform industrialized nations
August 1, 2010
While the US is struggling toward recovery and the Eurozone falls behind, the stars of the commercial real estate show right now are emerging economies. So who’s included in that lucky group?
Latin America’s commercial property market has really been taking off lately. Peru and Brazil were the most optimistic both about their commercial rental market and actual capital value. The umbrella term of emerging economies also includes Hong Kong and India. These countries are actually experiencing verifiable economic growth despite the global downturn, which makes them capable of supporting a bolstering real estate market and stimulating occupier demand.
According to PR NewsWire:
Occupier demand has increased in Brazil from 70 per cent to 85 per cent with Peru and China experiencing marked increases in the measurement as well. You might say– “Wait, hasn’t China been trying to avoid these increases by way of federal interference?” Well, it turns out that the projected growth curve outweighs the nasty policy introductions and leaves China’s real estate market still on the upswing.
Although this post is about a trend in commercial real estate, it’s an overarching trend as well. Developed countries, while obviously still the richest countries in the world, cannot keep up with the rapid growth rates of developing countries. Sure, these new industries are using technology we’ve already come up with, but they’re also developing new specialties (like the low-cost IT sectors in India and China). The development of the world economy could be a stark contrast to the 20th century when rich countries mostly got richer. The 21st century could hold something very different in store.