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Global Market Perspective - First Quarter 2011

‘Resurgence’ is the watchword for 2011 with the market anticipating the strongest real estate trading and performance since 2007. Barring further financial shocks, we are expecting investment volumes to rise by a further 20-25% in 2011, which follows their 50% growth in 2010. With a significant weight of money targeting real estate across the globe, last year’s robust capital value performance on prime assets in Tier I cities will spread further during 2011.

Corporate occupiers are again flexing their muscles and improvements in the leasing markets are helping to build investor confidence. Corporate cash balances and earnings are strong and major companies are poised to start spending again, just at the time when new supply in both North America and Europe is at a cyclical low. Shortages of quality space will emerge during 2011, limiting relocation options and causing a shift from tenant to landlord-favourable market conditions. This will be particularly visible across Asia Pacific, where there are likely to be few tenant-friendly markets left by year-end.

We believe the balance of risks in 2011 is set on the upside as global business optimism grows; a sentiment very much in evidence from political and business leaders at last week’s annual meeting of the World Economic Forum in Davos. While there are inevitable background concerns over inflationary pressures, rising interest rates and, particularly in Europe, sovereign debt, the market is keen to move on from the difficulties of the last few years.

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