Asian property folio growth to beat US

Return to business growth in Asia to result in future space requirements in region.

Global companies said their real estate portfolios will grow most in Asia by 2013,boosted by the powerhouse economies of China and India,with those in more mature markets trading sideways,a survey said. The Global Corporate Real Estate Survey by Jones Lang LaSalle and Thomson Reuters found respondents believed growth would be strongest in Asia Pacific.

The return to business growth in Asia is reflected in the predicted future space requirements in the region, said John Forrest,JLLs chief executive of corporate solutions for Asia Pacific,in a statement. In North Asia,economic dynamo China would help drive real estate portfolio values up by 60 per cent over the three-year period,while India would drive South Asian portfolio values up by 43 per cent,the survey showed.

South East Asian property portfolios would rise 27 per cent in value over the same period. The survey did not divine whether growth would be organic,or from development and acquisitions. However,overall portfolio sizes in United States and western Europe would remain flat or fall over the next three years,the survey showed.

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The global financial crisis saw commercial property values plunge in most major markets,forcing asset sales and causing many owners to refinance. Now,many companies are reshaping their real estate strategies,the survey said. Corporations have clearly shifted from short-term,survival motivated tactics towards medium-term,strategic initiatives aimed at driving productivity enhancements, said Stuart Hicks,chief executive of JLLs corporate solutions,Americas.

Driving improved productivity by implementing more strategic real estate initiatives can release tremendous value given that real estate typically accounts for 7 to 12 percent of a corporations total operating costs, he said. Of the 500 survey respondents,39 per cent said their global real estate portfolios would increase in size over the next three years,picking 34 percent growth in each of Eastern Europe and Latin America. The survey also found that more corporations were likely to outsource real estate providers to boost performance and seek knowhow in specific geographical areas.