Global property markets and Property Management

Citation

Warren, C.M.J. (2012), "Global property markets and Property Management", Property Management, Vol. 30 No. 5. https://doi.org/10.1108/pm.2012.11330eaa.001

Global property markets and Property Management

Article Type: Editorial From: Property Management, Volume 30, Issue 5.

As I write this Editorial the global economy remains in turmoil with almost daily downgrades of banks by the rating agencies and uncertainty as to the future of the euro and the fate of Greece, Spain and increasingly other EU members.

Against this backdrop of economic instability it is interesting to reflect on the state of the global property markets from a Property Management point of view. The leading international real estate advisory agencies seem to be reporting that markets are steady and showing some signs of improvement. Reports from the end of last year show that 2011 performed strongly with both JLL and Cushman & Wakefield reporting robust leasing activity and rising rents in the majority of markets. In this period rental grow was highest in the Asia-Pacific region with increases of 8 per cent and with standout increases in prime rents of 75 per cent for Beijing and 30 per cent in Shanghai (Cushman & Wakefield, 2012). This activity seems to have paused at the beginning of 2012 with falling levels of global investment and the pace of rental increases slowing. JLL (2012) report leasing volumes across the 90 markets they monitor have fallen by 15-25 per cent and that annual rental increases are within the region of 0.5 per cent. The levels of vacant commercial office space are continuing to fall with significant reductions in 2011. This fall is slowing in 2012. The global figure reported by JLL now stands at 13.4 per cent, but many of the faster moving economies in Asia, the USA and Canada are showing vacancy rates much lower than this global average. The main concern for both investors and property managers is that the rate of new office supply is very low, with a virtual absence of new supply in the USA and at very low levels in Asia. Market uncertainty and caution from banks to invest in new projects is constraining supply which is likely to fuel rapidly rising rentals if and when global markets recover from the euro crisis.

It seems from this market analysis that, while all eyes are on the euro and what can be done to save it, other regions, Asia and the USA in particular, continue the post GFC recovery, all be it with caution. Business remains extremely concerned that if the euro currency fails then this may trigger a recession in Europe which could make the GFC look like a minor bump in the road and if this happens no one wants to be caught again with a new building just coming out of the ground. As property managers we live in interesting times trying to guard against the potential for rapidly raising rental levels while at the same time being cautious that another global recession could well be on the cards.

Papers in this issue

This issue once again has a range of papers from around the world dealing with Property Management issues in both the commercial and residential markets. In their paper “Transparency in Malaysian property companies”, Muhammad Najib Razali and Yasmin Mohd Adnan explore the level of transaction transparency, measured by a customised transparency matrix, in 30 leading Malaysian property companies. Their findings will be of comfort to investors as they reveal that a good level of transparency and reporting is evident.

The second paper is by Joanna Poon from Nottingham Trent University. Joanna has undertaken a survey of property firms in the UK in order to ascertain the attributes that employers seek in graduates from property courses. The paper, “Real estate graduates” employability skills: the perspective of human resource managers of surveying firms, shows that professionalism and ethics are high on the list of desired attributes.

Paper three is entitled “Housing wealth, stock wealth and consumption expenditure: a dynamic analysis for Hong Kong”. This research paper examines the relationship between consumption expenditure and household wealth in terms of housing and stock wealth in Hong Kong.

Then from Samuel Azasu there is a paper titled “A survey of reward management practices in the Swedish real estate sector”. This paper provides a fascinating insight into the management of the Swedish residential real estate sector and the methods used to attract, retain, motivate and reward employees.

The final paper in this edition of Property Management is by KH Chan and based on research undertaken into the maintenance of buildings in Hong Kong and focuses on the effects of mandatory government control of the inspection process to enhance public safety. The paper is entitled “Improving building safety in property maintenance”.

Once again there is a varied and diverse content which makes interesting reading and I thank all contributors. In particular, I would like to offer my sincere thanks to Nigel Almond, Head of Research at DTZ in London for his considerable contribution to the journal over many years. His editorship of the Internet Update in each edition of Property Management is very well received and has helped us all keep up to date with the rapidly changing online world. On behalf of the journal and myself, I wish Nigel every success for the future.

Clive M.J. Warren