Reporting on prospects for global property markets markets for the year ahead, Henderson Global Investors say that in Asia they predict that global commercial property investment will track macroeconomic indicators in 2011 and that as such, Asia’s ability to weather the global financial storm, in addition to its attractive growth prospects and low interest rate environment, will underpin continued investor interest.

Within the report, Henderson looks specifically at the outlook for the office, retail, industrial and residential markets. A few of the key trends are summarised:

Singapore’s prime office market, where rents rose 10% last quarter, is expected to enjoy sizable rental growth in the next few years, closely followed by Hong Kong, Beijing and Shanghai, underpinned by their booming economies.

Improving labour market conditions and resilient, strong consumer confidence underpins healthy retailer demand in the region. Demand for new mall space has been particularly strong, especially in China as more international brands, attracted by the potential of the Chinese consumer, look to set up new stores in second and third tier cities.

The industrial sector proved the most resilient during the financial crisis, and regional industrial markets continue to improve on the back of encouraging trade and retail sales figures. Rents are starting to rise in greater China and Singapore but the stability of the sector and its effective rental growth will be determined by wider economic demand and talk of global currency wars.

Asia’s preference to own a property rather than to rent one keeps pushing residential yields downwards. House prices keep setting new records in Singapore, Hong Kong and across China’s top tier cities.

Charlie Huang, research analyst, Asia at Henderson comments: “Lingering global sovereign debt concerns highlight that potential downside risks to growth remain. Nevertheless, the improvement in domestic conditions in many Asia-Pacific countries, combined with the generally low levels of indebtedness and the region’s compelling structural drivers, should place it on a solid growth trajectory over the short to medium term.”

Finally, in the US, Henderson believes economic and property markets are on the right track to reach full recovery. It suggests that the property price correction now offers an attractive entry point into the US property market.
Edward Pierzak, chief investment strategist, property, North America, at Henderson said: ”The current flight to quality and focus on primary markets is likely to continue. Over the coming year, investor demand is expected to focus on core and opportunistic investment strategies. Newly-acquired unlevered core properties are anticipated to offer annual total returns around 8% over the next five years. “