Monday 26 October 2015

Australia, Hong Kong and Poland Real Estate Report 2016 Market Report; Launched via MarketResearchReports.com

Australia, Hong Kong and Poland Real Estate Report 2016

Australia's real estate sector continues to see investment from Asia as slowing local markets and an attractive AUD exchange rate present opportunity, particularly to the property manager. Investment is strongest in the retail sector and is expected to mitigate the downturn in mining output and export production affecting in demand for storage facilities in the industrial sector. Such demand in the retail sector from consumers and investors alike stands to benefit the large shopping mall complexes and luxury retailers as demand for the traditional high-street store is seen to be tapering off.

Australia's real GDP growth slowed further in Q215 coming in at a subdued rate of 2.0% y-o-y, versus an upwardly revised rate of 2.5% y-o-y in Q115, bringing economic growth for the first half of the year to 2.3% y-o-y. We continue to see headline GDP growth at subdued levels over the coming quarters due to domestic and external economic weaknesses, and we therefore maintain our below consensus 2015 and 2016 real GDP growth forecast of 2.3% (versus 2.7% in 2014).


The office sector continues to offer the most promise regarding rentals, as Grade A establishments remain in high demand and lack of available space is pushing upward trend. Industrial real estate also represents a potential area for investment as the limited space, good demand and inauguration of national 'reindustrialisation' looks to offer opportunities in the mid-term. We opine that Retail will witness further contractions and advise vigilance when considering this market over the same period.

We have revised our economic forecast for growth in Hong Kong with real GDP to remain steady at 2.5% over 2016, no change from 2015, as the regional pressures, predominantly stemming from fiscal reforms and corrections in China, Hong Kong's largest trade partner, weigh-in on demand into the Asian Tiger economy. A main culprit that has subdued interest is the strong national currency. The HKD is tied to the US dollar, the recent rally in the greenback has seen Hong Kong exports become less competitive and the city viewed as a more expensive destination for travel and commerce. However, promising underlying macro-economic factors, such as rising private consumption, and the fact that foreign companies are interested in Hong Kong's semi-autonomous market due to its transparency and strong legal accountability, will keep demand particularly strong in areas such as tertiary services. We therefore opine real GDP to grow 1.1% to 3.6% by 2017. All three real estate sub-sectors that we cover are likely to benefit from the improving economic situation, and see activity rise across the medium term.


Buoyed by a steady and robust economy, the medium-term outlook for Poland's real estate sector is bright. Strong growth in service sector output should drive demand for office space. The retail real estate sector should benefit from the impact of higher purchasing power and consumer spending which will increase retailers' requirements for space, while the industrial market is likely to be positively impacted by the increase in trade as well as on-line retailing and e-commerce, which will help to increase demand for storage space and ensure market dynamism.

The Polish economy is expected to see strong steady growth over the next five years. GDP is forecast to pick-up next year to 4.0% and to average at 4.2% per annum over the period 2017-19. An affluent population, rising private consumption and a strong manufacturing and external sector will ensure all three markets in the real estate sector will benefit.

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