2012 Global Market report - NAI Global

ankrupt. Large retailers continue to close significant numbers of stores nationwide due
to current and forecasted consumer sentiment.
Asia Pacific Overview
Asia Pacific investment markets have not been immune to the global volatility, most
recently with the eurozone debt crisis. In the Asia Pacific region, Hong Kong, Singapore,
Japan, and Australia all saw transactions slow in Q3 2011, although China’s volume for
both commercial property and land continued to increase, but at a far slower pace.
There have been some major governmental interventions through tighter property
regulations over the last 12 months in places like Singapore, Hong Kong and China. These
regulations have primarily been directed to control spiraling residential values and reduce
speculation. Such policies include restrictions on the number of properties one family can
own in one city, larger down payment requirements, higher stamp duty (tax) on the seller
if the property is traded within three to five years of acquisition, as well as the introduction
of annual property taxes. As a result, there has been some cooling on the transactional
volumes of residential properties in all three markets. Anecdotally, there is some evidence
of residential prices beginning to drop in China and there have been several cases of early
buyers protesting developer price discounts to newer buyers. Hong Kong is beginning to
see some softening in residential values, albeit after the last two years of major rises in
value, and Singapore has been able to basically hold values to date. None of these
government regulations have been directed toward the commercial property sector, which
in markets like China, has residential developers moving into commercial development.
Aside from residential and commercial markets, key hotel markets in Asia have seen
excellent growth. Best performing markets in Asia, which are projected to achieve double
digit growth in RevPAR for 2011, include Singapore, Beijing and Hong Kong with
continued but slower growth in 2012.
Singapore has seen some of the highest levels of supply growth in the region with a lot more
in the pipeline. Beijing is forecasted to have the highest level of demand growth in 2011,
whereas Hong Kong is expected to finish the year with the highest level of ADR growth. The
ability to get debt financing for new hotel construction is becoming more difficult in China.
Office
As the eurozone sovereign debt crisis has evolved, rapid rental rate increases have
ceased in Singapore and Hong Kong and are now in a downward mode, with these
markets having clearly peaked.
Tokyo, Kuala Lumpur, Seoul, Ho Chi Minh City and Taipei are at or approaching the
bottom of declining rent phases and will start to see higher rates. Jakarta, Manila,
Shanghai and Beijing have already seen healthy rental increases but are forecast to see
slower growth in 2012.
Retail
There are early signs of rental growth in Singapore and Hong Kong. Tokyo, Jakarta and
Shanghai have reached the bottom and should start to see stronger, rising rents. Manila,
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