"Assuming no further negative news... we see a narrowing in the gap between buyer and seller expectations toward the end of this year," says Megan Walters, chief economist Asia Pacific for Cushman & Wakefield.

The report pegs the investment market here for Q1 as "pretty dire," but with indications that things will pick up by the end of the year. For instance, "Two transactions of single floors in Suntec City showed a yield of between 4.8 to 5.2%, which provided a boost to the market. The gap in yield pricing between buyers and sellers has now started to narrow from a gap of between 30 to 40% apart to a gap of 5 to 15% - narrow enough for a good brokers to bridge a deal.," the report highlights.

Tenant demand, especially by international clients, will likely return to Asia Pacific by Q1 2010. "We expect tenant demand will remain weak for 2009, with an upturn in the first half of 2010," Walters says.

While tenant demand and investor demand will help boost the economy, rent growth will remain slow to rebound. "Rent growth, however, will take longer to recover as supply comes on stream in many Asian cities across 2010 and 2011," Walters says.

The report indicates that retail and industrial space is expected to rebound the quickest. Sydney and Shanghai should will experience the quickest rental recovery. Both Tokyo and Singapore will continue to see a drop in rental rates as more supply comes to the market before it has time to recover.

Before launching into the state of the Asia Pacific market, The Economic Pulse quotes a report by the International Monetary Fund, which says synchronized recessions, like the one the world is experiencing now, take significantly longer to cycle from peak to trough. The average non-synchronized recessions takes 3.64 quarters while a synchronized one, like the ones seen in 1975, 1980 and 1992, last 7.33 quarters. Likewise, recovery takes longer when all the markets are in sync - lasting 6.75 quarters instead of the average 3.22 quarters.

This matches the findings reported by GlobeSt.com last week from the global index released by Investment Property Databank.

Instant Insights /

Report: Gap Narrows Between Buyers, Sellers

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