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Unresolved issues take toll on commercial real estate - Q2 2012

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Unresolved issues take toll on commercial real estate - Q2 2012

Despite the last few years of macro malaise, commercial real estate metrics have seen modest improvements. The performance across the globe in Q2 2012 was positive, but the pace moderated. Persistent, unresolved global and political economic challenges inexorably dampened progress and confidence.

There is significant indecision among occupiers and investors as a result of the fragile state of the global economy. Both have shown a heightened preference for prime space—space that is short in supply and rising in price. U.S. and Latin American markets have seen remarkable growth in their prime subsectors throughout the first half of 2012.

Rents in this report focus on the prime segment, which witnessed the strongest demand no matter the property type while in many cases, secondary space has not yet witnessed recoveries of comparable strength.

Global Retail Rent Index recorded the top quarterly increase among the property types during Q2 2012 followed by the industrial property sector.

Global office markets witnessed modest advancement, driven mostly by the U.S. leasing market, which has seen growth in demand from technology and energy tenants. Strong demand for prime logistics space, especially in the U.S., Canada and Asia Pacific, drove global industrial rents. Demand from retailers - particularly retailers active in e-commerce - and third party logistics distributors are behind this demand.

All property sectors across EMEA remain strained by the European sovereign debt crisis. Not surprisingly, pockets of market growth are isolated to stronger economies, such as Germany and the Nordics, or to niche property segments such as Paris and London High Street retail.

Source : CBRE

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