According to Colliers' biannual Asia Pacific Industrial MarketOverview, released Dec. 1, the growth of the industrial propertymarkets in most Asia Pacific cities has slowed compared to theprevious review period. The report, which covers 12 cities in eightcountries, says the economic downturn in major economies around theworld has affected demand for exports by Asia Pacific cities, whichin turn has reduced demand for industrial premises and slowed newconstructions.

Acquisitions have also dwindled as the uncertainties in globalfinancial markets, tightening credit conditions and increasedfunding costs have dampened investor interest. According to NewYork City-based Real Capital Analytics, Asia-Pacific property salesplunged 68% in Q3, compared with 18% year over year throughAugust.

On the other hand, say Colliers researchers, the same set offactors has made leasing more cost-effective than owning, lendingstrength to the rental market. Unfortunately, the shift is notlarge enough to keep vacancies from rising or rents from falling.According to the report, industrial rents in most markets havedropped since April.