Reasons Lafarge Africa has a SELL recommendation

Buy Sell Hold is picked from the top gainers and losers of the previous week, as well as various analyst results.

Custodian Investments: SELL

Recent ResultsResults for the nine months ended September 30, 2018 show that gross revenue increased from N31.8 billion in 2017 to N36.2 billion in 2018. Profit before tax increased from N6.1 billion in 2017 to N6.8 billion in 2018. Profit after tax also rose from N4.6 billion in 2017 to N5.1 billion in 2018.

Price Information

Current Share Price: N 5.80

Price to Earnings Ratio: 4.56X

Price to Book Ratio: 0.8

Year to Date Return: 2.7%

One Year Return: 59.88%

External View 

Analysts at Afrinvest Securities have a “Reduce” recommendation on the stock. They have a 12-month target price of N6.10, which is 0.2% above the stock’s price of N6.10 as at when the report was prepared.

Our View 

Custodian Investment is a SELL in Nairametrics’ opinion. The stock is currently trading close to an all time high, and could decline further in the coming weeks.

Upcoming elections have led to bearish sentiments on the Nigerian Stock Exchange, and are likely to remain dominant. Investors would be better off waiting for significant correction before taking a position.

Julius Berger: SELL 

Recent Results: Results for the nine months ended September 30, 2018 show that revenue increased from N105 billion in 2017 to N118 billion. Profit before tax increased from N85 million in 2017 to N5 billion in 2018. The firm made a profit after tax of N3.4 billion, as against a loss of N349 million recorded in the comparative period of 2017.

Price Information

Current Share Price: N28.4

Price to Earnings Ratio: 7.87X

Price to Book Ratio: 1.24

Year to Date: 41.3%

One Year Return: 0.24%

External View

Our View

Julius Berger is a SELL in Nairametrics’ opinion. The stock is trading at a 6 month high, and could decline further if negative sentiments in the markets are pronounced. The NSE has fallen sharply in the first few days of trading, and could decline further in the coming weeks prior to the election.

The stock has also out peformed the index by iver 30% in just a few weeks of the year, in what is turning out to be a bearish month. Investors are best exiting the stock for now.

Lafarge Africa: SELL 

Recent Results:

Results for the nine months ended September 30 2018, show revenue increased from N223 billion in 2017 to N234 billion in 2018.

The firm made a loss before tax of N14.3 billion in 2018, as against a profit before tax of N1 billion for the corresponding period of 2017.

Price Information

Current Price: N12

Price to Earnings Ratio: None 

Price to Book Ratio: 0.8 

One Year Return: N75.42

Year to Date Return: -3.6%

*Lafarge recorded a loss in the 2017 financial year, hence the absence of a PE ratio.

External View

Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a target price of N13.7 which amounts to a potential upside of 21.2% from the stock’s price of N11.3 as at when the report was prepared.

Analysts at FBNQuest have a ‘Neutral’ opinion on the stock. They have a target price of N21.5 which represents a potential upside of 89.8% from the stock’s price of N11.3 as at when the report was prepared.

Our View

Lafarge Africa is a SELL in Nairametrics’ opinion. The stock is currently trading close to a 5-year low of N11.5 and may slide below that whenever full year 2018 results are released.

The company is very likely to record a full year 2018 loss, and will witness dilution following the listing of the additional shares from its rights issue.

Investors would be better off waiting for first quarter 2019 results and/or the listing of the stock’s additional shares before taking positions.

Source: Nairametrics

How Policy decisions, interest rates slowed the real estate market in 2018

As real estate market stats pour in from across Canada, it is becoming abundantly clear that property markets in 2018 lost the momentum of recent years.

Households, governments and industry watchers alike are concerned about the direction real estate markets have taken. Even though sales and, in some places, prices, are lower than before, housing affordability has not necessarily improved.

Many wonder if it is the right time to buy or sell. Others wonder whether real estate markets are going to decline even further, or if the markets will turn around in 2019.

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The answer to these questions is: It depends. It depends upon interest rates, job growth, wage increases, demand for housing, government interventions and more. While one can speculate about the future, it is always beneficial to first understand what has transpired in the past.

The Greater Toronto housing market, the largest in Canada, has recorded fewer sales in 2018 than it did in any year in the past 10 years. In fact, the last time Toronto’s real estate market recorded fewer than 80,000 sales was in 2008.

That year was exceptional for two reasons. First, the Canadian economy was showing signs of weakness as it and most others around the world entered into the Great Recession. Second, the City of Toronto imposed a new land transfer tax that made some buyers advance their home purchases to 2007, resulting in fewer sales in 2008.

But even in 2008, nominal housing prices did not fall relative to 2007. That means 2018 is unique because the average nominal housing price actually declined by 4.3 per cent.

Vancouver’s housing market, in which 24,619 sales were recorded in 2018, was no better. The Real Estate Board of Greater Vancouver noted that sales in 2018 hit “the lowest annual total in the region since 2000.” The composite benchmark price in December 2018 declined by 2.7 per cent from a year earlier.

Despite declining prices, many believe that housing affordability is unlikely to improve. A recent report by the Royal Bank of Canada (RBC) observed that homeownership costs relative to median incomes will continue to rise in Canada. The RBC report said that by the end of 2019, “owning a home will take up 79 per cent of the median household income” in Toronto.

In Vancouver, home ownership costs claim 88 per cent of the median household income. RBC expects home ownership costs to rise in Calgary, Edmonton, Ottawa and Montreal.

The high levels of household debt in expensive housing markets is another source of concern. The Canada Mortgage and Housing Corporation reported that the debt-to-income ratio was 208 per cent for the residents of Toronto. For Vancouverites, it was even worse at 242 per cent.

Most of the household debt is mortgage debt, which is sensitive to changes in interest rates. The Bank of Canada has raised interest rates multiple times in the past few years. The Bank’s decision Wednesday not to raise rates any further suggests it is mindful of the slowdown in the global economy that has been worsened by the trade tussle between the U.S. and China.

While the consensus is lacking about the future of interest rates in Canada, many believe that the fundamentals are missing to justify significant interest hikes in Canada in 2019. This will be good news for home ownership.

Housing markets have withstood a series of policy interventions by provincial and federal governments that include additional transactional taxes on foreign homebuyers, stringent mortgage regulations, stress tests, rising interest rates and more. The slowdown in housing markets, one must realize, is the expected and intended response to a series of regulatory changes and hence must not be viewed solely as a sign of market weakness.

At the same time, one should also consider a long-term view of the property markets. Housing is a durable good that provides shelter and other amenities while growing in value as an asset class. The average home price in the cities and surrounding areas of Vancouver and Toronto is up 100 per cent over 10 years.

The increase in average housing prices over the long run should, therefore, provide perspective to those who own or are considering buying a house.

Five Ways To Prepare Your Real Estate Business For The Year Ahead

Nothing inspires me more than a new year. It represents a fresh start and a reboot. While some hardly seem to notice, my energy is at full throttle because I see 52 weeks of new opportunities to celebrate success ahead. I get excited about new beginnings, fresh ideas, updates to marketing plans and promotional tools.

Prepare To Hit The Ground Running

When we are busy, time passes quickly. Maybe last year you felt like you were always playing catch-up. If you promised yourself that wouldn’t happen this year, you still have time to make a good start on your business preparedness.

Here are five suggestions to help you gear up for the year ahead that have personally proven to be time well spent.

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1. Update Your Professional Profile

Review your biography. Your bio is often your first introduction to a potential client. Make it an outstanding one. If you haven’t refreshed it in the last few months, consider a rewrite. Kudos to you if you crossed that off your to-do list recently. In that case, review and add any new professional designations, awards or achievements. You should also include a new professional head-shot. Don’t forget to update all your social media platforms and websites where you are featured.

2. Follow Up With Holdover Leads

Contact people on your list of leads or past clients who were holding off on buying or selling until after the holiday season. Follow up with sellers who wanted to list in the spring. It is not too early to inspire them to begin preparations for a March or April listing. Last but not least, connect with your general mailing list, and update them on what is new and exciting about the housing market or your agency.

3. Review Your Tools Of The Trade

Take stock of your work and tech tools. Is your phone, tablet or computer holding you back and making your work more difficult? Then it’s time for an upgrade. For real estate professionals, the year’s busiest months are right around the corner, so don’t hesitate. Do it now when you have time to shop and get accustomed to your new tools.

4. Improve Your Chances By Listening to the Experts

Listen to the experts. Find out what they see ahead for the economy and how it will affect housing. When you set your professional goals and priorities, it’s imperative to have a sense of what to expect on the national scene and the local front.

5. Establish Your Goals, Budget And Marketing Plan

Do a general review of your business. Establish your 2019 goals, and include any from last year that were not accomplished but are still relevant. Take a look at your budget. Did you have a surplus or fall short last year? Make adjustments and establish your business expense priorities for the coming year. Review your local housing market statistics. How has the situation changed, or what do you see happening differently this year? Determine how this fits into your overall marketing plan.

My expectations for the 2019 real estate market are high, and falling short is not on my bucket list. We may not be able to control everything, but we can position ourselves to be ready for anything.

Joe Houghton is Founder of The Minnesita Property Group,providing outstanding real estate services to the Twin Cities metro area.

Real Estate Investment Trust: Corporate governance will drive investor confidence

The South African real estate investment trust (Reit) sector’s focus on improved corporate governance is expected to support positive sentiment for investment in listed property this year, says real estate analyst Wynand Smit.

He explains that the performance of local Reits in the coming year will be influenced by improving levels of confidence in the listed property sector.

Additionally, he states that the local Reit sector’s positive performance prospects signal “double-digit growth in returns to investors”, which Smit believes should be around the sector’s historical annualised ten-year total return of 14%.

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He further notes that improved confidence levels “will depend on the steps taken by individual companies but, more importantly, steps taken by all stakeholders and relevant industry bodies such as the SA Reit Association.”

Since its inception in 2013, when Reit legislation was introduced in South Africa, the association has prioritized driving transparent, clear and comparable financial reporting for the sector.

The association is currently updating its best practice recommendations (BPRs), which is intended to reduce divergence in reporting implementation among sector counters. The updated BPR will reflect new accounting and regulatory issues, address issues raised by asset managers and integrate changes proposed by key industry stakeholders.

The association has resolved to revise its BPRs with an even more vigorous focus on consistency and transparency in the financial reporting of Reits, says Smit. Pointing out that there is a big focus on sustainable earnings in the sector, Smit says “investors have voiced their preference for clean, sustainable earnings”.

Transparent reporting ensures that a Reit’s sources of income are clearly stated, Smit adds. The association expects to share its progress with the market in this regard early this year.

Meanwhile, SA Reit Association marketing committee chairperson Andrea Taverna-Turisan believes “the time is right” to take the next step and issue more robust guidance for Reits.

“Our members want investors and stakeholders to be confident in the consistency of reporting from the sector. Overall, the Reit sector has established a record of transparency and trust, and we want to reinforce this in the market. We are putting the sector on the best footing for best practice as it enters 2019,” he said.

Additionally, the statement noted that Catalyst Fund Managers expects 2019 to stand out from the past year as a result of the big focus on improving governance in the sector.

Improved corporate governance, Catalyst’s Mvula Seroto explains, will make Reits a good investment this year.

Besides an improved focus on governance in the sector and its positive performance outlook for this year, factors that market commentators believe will make local Reits appealing investments in the year ahead include the sector’s historically high yields and the good value to be found in the share prices of many Reits.

Global building and construction plastic market to reach $104,507 million by 2025

The global building and construction plastic market was valued at $57,908.8 million in 2018 and is expected to reach $104,507 million by 2025, growing at a CAGR of 7.6%. Building and construction plastics are polymers that are treated chemically to obtain products for building and construction industry. These products are used for various purposes such as flooring, cladding & roof membranes, cables, flooring & wallcovering, insulation, piping, and window & door panels in the building and construction industry. Different types of plastic composites in flooring includes wood plastic composite (WPC), luxury vinyl tiles (LVT), and stone plastic composite (SPC).

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The demand for building and construction plastics is increasing due to rapid rise in investment in the residential and commercial infrastructure. In addition, major players are adopting various strategies such as product launches and acquisitions to stimulate the growth of the market. For instance, in November 2016, INEOS Olefins & Polymers USAacquired 100% shares of the WLP Holding Corp.

Therefore, such developmental strategies are estimated to drive the growth of the global market. However, rise in ecological concerns and stringent laws by regulatory bodies regarding use of plastics are expected to restrain the growth of the global building and construction plastic market. On the contrary, technological improvements to produce eco-friendly and recycled plastics are anticipated to provide lucrative opportunities for the growth of the global market. 

The global building and construction plastic market is segmented based on type, application, and region. Based on type, the market is bifurcated into thermoplastic and thermosetting plastic. The thermoplastic segment is further categorized into polyethylene (PE), polyvinyl chloride (PVC), polystyrene (PS), polypropylene, polycarbonate, polymethyl methacrylate, and others. The thermosetting plastic segment is further divided into polyurethane and others, which include polyesters, epoxy resins, and phenolic resins.

The thermoplastic segment is anticipated to dominate the global building and construction plastic market during the forecast period. By application, it is categorized into flooring, window & door panels, siding, piping, roofing, insulation, and others (weather boarding, paint, varnish, adhesives, and thin coverings). The flooring segment is further divided into wood plastic composite (WPC), luxury vinyl tile (LVT), stone plastic composite (SPC), and others.

The others in the flooring segment include fiberglass composite and bamboo composite tiles. The piping segment is projected to grow at a significant CAGR in the near future. 

The global building and construction plastic market is analyzed across North America (U.S., Canada, and Mexico), Europe(GermanyFrance, UK, Italy, and Rest of Europe), Asia-Pacific (ChinaJapanIndiaAustralia, and rest of Asia-Pacific), and LAMEA (Latin AmericaMiddle East, and Africa). Asia-Pacific is expected to dominate the market during the forecast period. 

Rising Number of Female Investors in Real Estate

Real estate sector in India has grown enormously in the last decade and currently contributes 5 to 6 per cent to the GDP of the country. Real estate sector is expected to contribute 13 per cent of GDP by 2025 and reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017. India is one of the fastest growing economies across the globe makes real estate a subject of interest for investors. Real estate is considered as the male-dominated industry, however, with women entering into the sector, the industry has changed significantly. The number of women in real estate has been increasing gradually over the past few years. Be it an investment or running a real estate company, women have made real estate their domain.

Several factors are playing as a catalyst and have led to the rise in a number of female investors in the real estate industry.

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Increasing Financial Capacity

Indian economy has grown by leaps and bounds and has strengthened the financial capacities of working women living in the country. In metropolitan cities like Mumbai, females are more ambitious and career driven. The ratio of earning is equal to the male counterpart. Entrepreneurship is a trending culture which is being picked up very quickly by young female aspirants living in major urban areas. Women in today’s world are well educated, qualified and have global exposure. They have the quality needed to excel in the real estate industry. Government policies to support the startups have created a positive environment and have given women an extra spur to run their own company. For instance, many female entrepreneurs are running their own real estate company and gaining prominence in the commercial real estate.

Increased spending capacity in cities has made women savvier about their finances and monetary investments. Women are becoming active and aggressive investors in real estate. Majority of the working women prefer to invest in property rather than investing in share market and mutual funds.

Affordable Housing: a Most Promising Solution

Women in old days were supposed to get married at a certain age and a single woman was considered an oddity in the society. But in today’s world, there is an increase in

the cohort of single, working women living in major urban areas. They are being liberated by the salaries they earn and are not shying away when it comes to buying a home of their own. But in a city like Mumbai drubbing property prices makes it difficult to buy a home in the city centre where the price of an apartment with 450 sq ft space ranges from 90 lakhs to 1.5 Cr. Hence affordable housing is the most fitting solution for women who are leading an independent lifestyle, staying away from family. Keeping that in mind developers are coming up with housing projects which are affordable and convenient as well along with better connectivity to urban areas of the cities.

Advantages to the sector:

1. Eminent Leadership

Real estate in India is the most recognized sector and is the 2nd largest employer after agriculture. Participation of women in the higher productivity sectors has fuelled economic growth. Women are getting recognition steadily for their distinctive work ethics and leadership quality in the industry. Women are blessed with the power of multi-tasking& transporting successfully both personal & social competency by bringing out the power of their personality to serve the purpose.

2. Better Client Relationship

Women in the industry have an edge over their male colleagues. Empathy and “Never give up” spirit are the two qualities that already exist in the DNA of women. Women are more caring, nurturing patient in nature and sensitive towards the needs of the clients.

Women know how to balance things and are good at multitasking which is a crucial aspect of real estate. Educated women are able to balance the things and are able to bring compassion, determination and the needed synergy to take the business forward in an efficient manner.

This article was written by Rohit Poddar. A real estate professional based in India.

Gita Gopinath joins IMF as its first female chief economist

Mysore-born Gita Gopinath has joined International Monetary Fund as its chief economist, becoming the first woman to occupy the top IMF post. Gopinath’s joined last week at a time, when she believes the world is experiencing a retreat from globalisation, posing challenges to multilateral institutions.

The John Zwaanstra professor of International Studies and Economics at Harvard University, Gopinath, 47, succeeds Maurice (Maury) Obstfeld as Economic Counsellor and Director of the IMF’s Research Department. Obstfeld retired December 31.

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Announcing her appointment on October 1, IMF Managing Director Christine Lagarde described her as “one of the world’s outstanding economists with impeccable academic credentials, a proven track record of intellectual leadership and extensive international experience.”

The 11th chief economist of the IMF, Gopinath in a recent interview to The Harvard Gazette described her appointment at the IMF as a “tremendous honour” and said the appointment of the first ever woman for this position speaks highly of IMF’s Managing Director Lagard

Identifying some of her top priorities at the IMF, Gopinath told The Harvard Gazette that she would like the IMF to continue to be a place that provides intellectual leadership on important policy questions.

“Among the research issues that I would like to push, one would be understanding the role of dominant currencies like the dollar in international trade and finance. We could do more on the empirical side to try to understand countries’ dollar exposures and on the theoretical side in terms of the implications for international spillovers, consequences of dollar shortages, etc,” she said.

Most countries invoice their trade in dollars and borrow internationally in dollars. This is a central part of the international price system and the international financial system and it will be exciting to explore its consequences in greater depth with the IMF, she said.

“The one (biggest issues being faced by the IMF) that is absolutely clear and present is that we are seeing the first serious retreat from globalisation. This has not happened in the past 50 or 60 years, when the world moved toward lower tariffs and increasing trade across countries,” she told the prestigious Harvard publication.

“Over the past several months, we have the US-imposed tariffs and retaliation to them from China and other nations. There is in general growing uncertainty about trade policy, including the one arising out of Brexit [the British move to leave the European Union].

“While the trade has reduced global poverty and raised livelihoods, its consequences for inequality, and on whether the rules of engagement are fair, are real concerns that need to be addressed,” she said.

Gopinath said there is also a concern about whether there is the right multilateral institutions and frameworks in place to make sure everybody feels that there is fairness in trade. “And the same goes for capital flows,” she added.

“Foreign direct investment [FDI] was always viewed very favourably by countries. But because most of the FDI is now in tech-heavy firms, there are growing concerns about national security and international property theft. So I believe this retreat from globalisation and this retreat from multilateralism is quite unique to the times we are living in,” Gopinath said.

ihsAnother important concern, she said, is the health of emerging markets as the US continues to normalize its interest rates.

The capital flows to several markets have reversed, putting pressure on their exchange rates and consequently on inflation, and on balance sheets, given that several emerging markets borrow heavily in dollars, said the IMF chief economist.

Survey reveals business uncertainty in UK construction sector

Activity in the UK construction sector was the weakest for three months, due to a slowdown in commercial work, according to a survey of executives working in the building trade published this week.

The IHS Markit construction index fell to 52.8 in December, down from 53.4 in November and slightly below a consensus forecast among economists of a reading of 52.9. Demand for commercial building work, which includes shops and office blocks, is particularly closely linked to uncertainty and the slowdown in new orders suggests that Brexit may be chilling business investment.

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“Subdued domestic economic conditions and an intense headwind from political uncertainty resulted in the weakest upturn in commercial work for seven months,” said Tim Moore, economics associate director at IHS Markit. The construction survey follows a similar poll for manufacturing businesses, released,which suggested that stockpiling of components and finished goods ahead of Brexit was helping to support activity in Britain’s factories.

Together the two surveys show how the political turmoil in Westminster over whether to pass the withdrawal deal is already having an effect on British business. “A number of construction companies noted that heightened political uncertainty had encouraged delays to spending decisions among clients, especially in relation to commercial development projects,” Markit wrote in its report on the figures. However, business optimism picked up to the highest level since April despite the slowdown in overall activity.

Builders said this was due to a boost from “big-ticket transport and energy infrastructure projects in 2019”. New work on civil engineering projects, which includes infrastructure work such as on Crossrail and the Thames Tideway tunnel, picked up to the highest pace for more than one-and-a-half years, suggesting that government investment may help to support builders even as business investment slows.

Construction companies often refer to the three H’s of Britain’s infrastructure pipeline: the HS2 high speed rail line, the Hinkley Point nuclear power plant and the third Heathrow runway, which have now all been approved by parliament. “The construction sector has had little to cheer recently, but 2019 should be a better year,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

“A 10.4 per cent year-over-year jump in public sector gross investment in 2019-20 is set to boost the sector,” he said, adding that if a “no-deal Brexit” can be averted business investment could pick up.

Ssource:Financial Times

Shareholders Approve BUA,Cement Company of Northern Nigeria Merger

A federal high court sitting in Lagos has given its final approval to the scheme of merger between the Cement Company of Northern Nigeria and BUA Group’s Kalambaina Cement Company.

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According to a statement by the group, this comes on the back of “overwhelming shareholder approval” as well as final approvals by the regulators – Securities & Exchange Commission (SEC) and Nigerian Stock Exchange (NSE).

“With this development, the Nigerian Stock Exchange is expected to list the shares of the expanded entity in what has been described by the regulator as the largest deal of the year in Nigeria in 2018 at its recently held NSE CEO Awards,” BUA said.

Speaking on the development, Abdul Samad Rabiu, founder/executive chairman of BUA Group, praised the effort of all stakeholders in bringing the merger to fruition.

He said the expanded CCNN will remain the market leader in north-west Nigeria – the third largest market for cement in the country by consumption, whilst continuing to explore the huge opportunities that exist in the export markets of Niger, Burkina Faso and the West African region.

“Traditionally, the huge cost of transportation to CCNN’s home region from other cement plants in Nigeria – the nearest being about 900km away – has always given us a strategic advantage in that region over competing cement companies and brands,” he said.

“The expanded entity will leverage on the cost and energy efficiency of the newly commissioned Kalambaina Plant whilst providing additional value through its products in terms of better quality, higher yields and a stronger cement than competing premium cement brands.”

With the merger, the total installed capacity of the merged entity is expected to be two million metric tonnes per annum (MTPA).

The development will bring the total capacity of BUA’s cement operations to eight million MTPA as the group recently announced the completion of its three million MTP Obu II Cement Plant in Okpella Edo state.


2019:International Consultants say cautious optimism should guide the property market

It has been a year of mixed fortunes for property markets across the globe, and next year is likely to be the same. While there is optimism in most Asian countries, the ongoing trade war between China and the US could threaten the growth of property markets in some countries, such as China and Vietnam. However, there may be opportunities amid the risks as some companies may consider shifting their production to Asia to avoid higher US tariffs.

In New Zealand and Australia, the outlook remains positive, driven by positive economic growth, but the outlook for London and New York is cloudy. This is partly driven by the messy Brexit negotiations in the UK and the trade war and a generally unfavourable view of President Donald Trump and his administration globally and in New York.

Read on for what global consultants have to say about the year that was and the opportunities and risks that lie ahead.

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Wei Min Tan

Licensed associate real estate broker, Castle Avenue Team at R New york


”The Manhattan property market continued its weakness in 3Q2018. Prices per sq ft for condominiums declined 11% during this period, compared with the average price last year. The quarter was down 5% year on year.

This correction, which started in 2Q2017, is driven by the change in tax law for self-use buyers, global trade wars and rising interest rates. This weak market is despite a very strong US and New York City (NYC) economy. NYC’s jobs have increased 20% since 2009, unemployment is at a low 4.1% and consumer confidence is near an 18-year high. Basically, Manhattan is experiencing a dip or correction — the first since the Great Recession of 2009/10.

The decline during the 2009/10 recession lasted two years. Using the same gauge, I expect the Manhattan weakness to continue at least until the spring of 2019, if not longer. At best, next year will stabilise but I do not foresee the market surging.

The Brooklyn co-op market has performed well despite Manhattan’s weakness. Co-ops in Prospect Heights and Park Slope have been getting crowded open houses and multiple bid scenarios. In 3Q2018, the median price for a Brooklyn co-op increased 12% while the average price rose 11% year on year. Co-op prices in Brooklyn have set new records as buyers take advantage of lower Brooklyn prices, although, in certain areas, prices of Brooklyn co-ops are similar to Manhattan’s.

The Manhattan condominium market is obviously an opportunity buy. In addition to price declines, transaction volume was down 12% in 3Q. The core Manhattan market lies in the US$1 million to US$2.5 million price segment.

Anything above US$2.5 million is having an even tougher time. SoHo lofts, larger Manhattan apartments that are 2-bedroom and above represent the biggest bargain-hunting opportunities.

New development projects, previously non-negotiable on price and terms, are now open to negotiation. Some are even offering a booking down payment of only 10%, relative to the norm of 20% to 25%. This is a reflection of Manhattan’s soft market.

A global trade war would make foreign buyers nervous about investing in Manhattan. As it is, President Donald Trump does not have a favourable image globally. This, I believe, is partly due to the media’s negative bias on Trump. When the media portrays him unfavourably, the news affects what the world thinks of our government. The change in tax law and rising interest rates are inevitable and the market just needs time to accept the new environment. Also, Trump’s actions and the US economy would definitely impact the world’s perception of Manhattan”.

Anuj Puri
Chairman of Anarock Property Consultants


”Commercial real estate was the most buoyant sector in India last year and remained so in 2018. With the International Monetary Fund predicting 7.3% growth in India’s economy this year, this segment is gaining traction across major cities. Demand for Grade A office space is growing while vacancy levels are declining in prime locations.

This year also brought a ray of hope for the residential sector, with sales and new supply gradually picking up across the top seven cities of Bengaluru, National Capital Region, Mumbai Metropolitan Region, Chennai, Kolkata, Pune and Hyderabad. New launch supply as at 1H2018 increased by nearly 10% over the corresponding period last year. Housing sales have also risen more than 5% in 1H2018 compared with 1H2017.

On the retail front, nearly 85 malls are expected to come up across the country over the next five years. Of these, more than 30 new shopping malls, spanning nearly 14 million sq ft, are likely to come up in the top eight cities by 2020.

Considering the present trends in the realty market and Anarock’s data, we may see nearly a 15% to 18% increase in new residential launches in 1H2019 (96,000 to 98,600 units). Despite the teething problems of game-changing policies such as the Real Estate Regulatory Authority and Goods and Services Tax in 2017 and early this year, the realty market grew 10% year on year in 1H2018. However, the commercial market will be the biggest beneficiary of the country’s overall economic growth. Global and domestic companies will continue investing in India’s skilled labour and business-friendly investment climate by committing to large office spaces nationwide, which will invariably lead to more absorption.

Residential real estate is picking up and the trend is likely to continue next year. However, the commercial segment is likely to remain the most attractive for investors in 2019.

There is a huge variation in the rental yields of commercial and residential properties. Commercial properties, including Grade A office spaces in prime locations, yield 7% to 8% while the rental yield of residential properties, even in the best areas, is 2% to 3%. This is much lower than the best markets of the world, namely Indonesia, the Philippines and Thailand, to name a few. With increasing demand for Grade A office space, rents will most likely see a steady rise and the contractual terms will be far more structured.

All in all, the Indian real estate market will remain robust next year only if the overall macroeconomic environment remains favourable, as it is now. It will be interesting to see the response to the listing of the first real estate investment trust in India.

James Hodge
Associate director, CBRE cambodia


”The Phnom Penh real estate market continued to forge ahead this year, with occupancy and rents in the office and retail sectors rising despite growing levels of new supply. Overall sales of condominiums slowed but remained robust for well-located and well-priced projects.

To date, the office sector has performed best this year, with demand increasing from all quarters and rents moving upwards. Occupancy reached levels not seen since modern supply first entered the market a decade ago, and newly completed properties are performing well.

Retail continues on an upward trajectory, propelled by steadily rising levels of disposable income. Supply, too, is growing substantially with much-needed well-planned and modern developments to diversify the consumer experience.

We anticipate an increased level of investment as we end the year and move into 2019. Development activity has picked up with clear diversification, particularly from local developers who are increasingly considering the commercial markets instead of focusing on the residential sector. Investors, including some large corporations, are showing interest in this market following the peaceful conclusion of the general election.

We anticipate a continuous surge of interest from local buyers for newly launched affordable housing projects. Luxury projects will primarily target foreign investors seeking higher yields than those available in their home markets. Commercial income-bearing assets are also likely to see a greater volume of transactions with investment sources diversifying and targeting asset classes that are widening to encompass more than land. Well-let office assets are likely to be an attractive asset class, with hospitality also performing well in the context of rapidly growing visitor numbers and improving infrastructure.

The large risk is geopolitical in nature, in particular hinging on the degree of pain felt by the country’s garment producers should the European Union cancel Cambodia’s trade preferences under the “Everything but Arms” initiative and any impact flowing from the US-China trade war should weaken sentiment from Chinese investors and enterprises active in the Southeast Asian markets. Domestic risks appear to be low, following the conclusion of Cambodia’s election and generally high confidence in the continued growth of the economy. However, oversupply is a threat in some sectors, particularly retail and mid-range condominiums”.


Dave Chiou
Senior director of research, China, Colliers International


”The overall market started off strong with all sectors carrying the momentum from last year. By May, concerns about the US-China trade war had started to seep into the market, causing a drop in investment sentiment as investors became increasingly cautious about the future.

The logistics sector in Shanghai remains one of the few areas that has seen limited impact so far, due to: (i) strong demand from e-commerce; (ii) a low vacancy rate of 8% with relatively mild supply increases of 10% to 15% per year, which should be easily absorbed by the market; and (iii) the demolition of illegal and unregistered warehouses leading to a 10% overall increase in logistics rents.

As a result of the lingering effects of the trade war and the government’s continued push for deleveraging, overall market demand is expected to be subdued next year. While the US and China have been trying to resolve their disputes, the likelihood of seeing a resolution before 1H2019 remains slim. Even if the disputes were to be resolved in the next two to three quarters, potential investors will remain on the sidelines for another one to two quarters before they actively resume their investment or expansion plans.

The logistics sector will be the bright spot next year, as vacancy rates will remain low and rents will continue on an upward trend. The government’s support for China’s first International Import Expo (CIIE), from Nov 5 to Nov 10, is a clear indication that the economy is transitioning into a more domestic consumption-driven market. Demand for logistics will continue to remain strong with more imported goods. The logistics sector will likely get an immediate boost from CIIE and the positive effects will trickle down to office and business parks in 2H2019.

The swing factors that could impact the property market include unexpected rate hikes and a prolonged trade war. We believe there is limited possibility of a rate hike next year, as China is trying to stimulate the economy to counter the negative effects of the trade war. On the flip side, the upside to the market includes more reserve requirement cuts injecting more money into the system and rate cuts to stimulate economic growth. In addition, a resolution to the trade war would improve market and investment sentiment, leading to an increase in real estate demand. Although domestic consumption now forms a larger slice of the economic pie, investments remain the biggest driver of growth, accounting for 42% to 45% of China’s overall gross domestic product”.

Dang Phuong Hang
Managing director, CBRE vietnam


”Strong gross domestic product growth of 6.98% for 9M2018 helped Vietnam affirm its position as one of the fastest growing economies in Asia. Its real estate market in general and in Ho Chi Minh City (HCMC) in particular, has had a good year so far.

Generally, the office sector has witnessed a significant increase in performance from the perspective of landlords, on the back of very limited new supply. Prime properties in the central business district with Grade A offices have seen rents rise more than 16% year on year, while vacancies are below 4%. E-commerce, co-working space and business centre companies emerged as important sources of demand for office space in HCMC.

After reaching a new high in terms of new supply in the past three years, new condominium supply, which is often considered the most dynamic sector of HCMC’s real estate market, moderated in 9M2018. Absorption rates of new projects, however, are still positive.

Many recent media discussions have centred on a possible recurrence of the so-called “10-year crisis cycle”. However, the steady factors that have underpinned the recent growth story of Vietnam’s real estate market — strong economic growth, a high level of foreign direct investment, relatively stable inflation and interest rates, rising income for the middle class, increasing number of tourist arrivals — are expected to remain intact next year.

The office sector, in particular, is expected to continue to see improving performance even though there will be some new buildings in non-CBD areas. The retail sector will see the reopening of a prime property, expansion of some high-profile non-CBD malls and proliferation of retail podiums (as part of residential developments). The condominium sector will continue to flourish as demand is still in place. Strong interest from foreign buyers is likely to continue, with many prime projects last year reaching the sales quota for foreigners, which is currently capped at 30% in one building.

The ongoing trade war between the US and China could have a spillover effect on Vietnam, as the country has integrated so deeply with the global supply chain that any reduction in global trade is going to have a negative impact on the country’s economy and, consequently, its real estate market. Having said that, this has led many global manufacturing companies, especially in the garment and textile industries, to consider moving their plants to Vietnam, which is evident from the rising number of enquiries that CBRE Vietnam’s industrial leasing team has received this year. This will be beneficial for the industrial real estate sector.

Steady economic growth and political stability were considered advantages that make Vietnam an attractive investment destination in recent years. However, the recent reshuffle of the government, nationally and at HCMC level, may affect the process of acquiring land or construction certificates for developers in the short term. Improving the infrastructure will play a pivotal role in further development of Vietnam’s real estate market. There is currently high expectation in HCMC about the upcoming Metro Line #1 (first Metro line ever in the city) and many projects close to the future stations will continue to be launched”.

Emily Cao
Head of research, north china, Colliers International


”The Grade A office, prime retail and prime logistics sectors of the Beijing commercial property market performed well this year. The prime logistics market saw the fastest rental growth rate due to the government’s demolition of illegal warehouses starting at end-2017. Rents increased to 48.1 yuan per sq m per month at end-3Q2018, 11.8% higher than the rate at end-2017. However, rising rents led to a slight increase in the vacancy rate of 0.3% as at end-3Q2018. We expect the vacant space to be rapidly absorbed in the upcoming quarters, considering the undersupply situation in the Beijing prime logistics market.

Despite the postponement of several launches to next year, nearly 550,000 sq m of Grade A office supply entered the market in 2018, the highest in the past decade. The vacancy rate increased by only 2% as at end-3Q2018 and rent reached 327.3 yuan per sq m per month by end-3Q2018, a decline of 1.4% compared with end-2017. This is mainly due to two new projects in an emerging sub-market that entered the market with high vacancy rates and low rents. The vacancy rate in the established sub-market was largely stable or declined slightly, while rents were largely stable or showed increases.

Two new shopping malls with a total space of 151,000 sq m opened in the first three quarters of 2018. The good performance of existing projects and the newly launched projects pushed down the overall vacancy rate by 0.7% compared with end-2017. The overall ground floor rent increased slightly to 825 yuan per sq m per month by end-3Q2018, up 1.1% compared with end-2017.

The Grade A office market is expected to hit a supply peak next year, with more than one million sq m of new supply entering the market after the postponement of several projects this year. The vacancy rate is projected to increase to 15.6% by end-2019 from 10.3% in 3Q2018. The abundant supply will also push rents down by 0.3% year on year in 2019.

The prime retail market will have nearly 630,000 sq m of new supply next year, which is expected to push up the vacancy rate to 4.3% by end-2019. Considering that 71% of the new supply will be outside the 5th Ring Road, the average rent is likely to decline 1.3% year-on-year in 2019.

Close to 260,000 sq m of new supply will enter the prime logistics market. However, we expect the undersupply in the segment to help absorb new supply and existing vacant space quickly. As a result, we project that all the prime logistics projects on the market will be fully occupied by the end of next year, supporting the 4% year-on-year increase in rent in 2019.

The office and logistics sectors are the most attractive to investors. However, the lack of tradable projects has resulted in fewer transactions this year. Thus, business parks have became a hot segment in recent years as they can be considered alternative office properties. With investors paying more attention to business parks, transacted prices have increased rapidly, which compressed the investment yield. We expect this condition will continue next year.

Policy plays an important role in the development of Beijing’s commercial property market. The release of the Beijing City Master Place in September last year and a series of policies and regulations in 2018 are expected to change  future demand and supply. For example, the relocation of non-capital functions out of the Beijing core area is likely to cause a decline in future office supply.

With Beijing positioned as the national political centre, national cultural centre, international commutation centre and technological innovation centre, we expect the technology sector to develop more rapidly with the support of the government. The tenant structure of office projects also has the potential to change in the long term.

We expect the commercial property market to continue to see strong demand in 2019, supported by a faster economic growth rate”.

Ian Little
Head of research, Bayleys Realty Group Ltd


”It has been another year of positive economic growth for New Zealand. Underpinned business expansion and new business formation have seen the country’s commercial and industrial property sectors performing strongly over the course of this year.

High levels of tenant demand have, to date, kept pace with the new development pipeline despite a significant increase in construction activity. As a result, vacancy rates across most of the country’s major centres have held at historically low levels, placing upward pressure on rents.

The investment sector has also remained extremely active with particularly fierce competition for institutional grade assets. Local investors, including property syndication groups, have faced increased interest from international entities looking to secure a position within the New Zealand market. Over the last four to five years, about 50% of transactions of commercial property with a purchase price of over NZ$20 million have been to international investors. This competition for assets has resulted in further yield compression driving an upward bias to capital values.

All commercial property sectors have performed well over the last year, with MSCI data showing the total return from “All Property” to have been just below 10% in the year to June. The industrial sector, though, has generated the highest returns, with the latest available figures showing the annual return to have exceeded 12.5%. These figures reflect the fact that vacancies in the sector are particularly low across most of the country’s major centres. Average vacancy rates across Auckland, Hamilton, Tauranga and Wellington are below 4%, according to surveys conducted by Bayleys Research. In addition, the sector has attracted high levels of investor interest given that entry values are generally lower than those prevalent within the office sector.

Looking ahead to next year, the outlook remains positive. The economy is forecast to continue to grow at a robust rate. There are still few signs of inflation, which will allow the Reserve Bank of New Zealand to hold interest rates at the current historically low levels. The pressure on rents is likely to ease, particularly in the office sector, as a significant supply pipeline better balances supply with demand.

Once again, the industrial sector is likely to be favoured by investors. Vacancy rates look set to remain at low levels given that the majority of new developments are conducted on a design-and-build basis as opposed to speculatively. The sector also provides opportunities across a wide value range.

Any headwinds impacting the market are more likely to come from international factors, such as the possibility of an escalation in trade wars or increases in international interest rates”.

Tom Bill
Partner, Head of London residential research, Knight Frank


”It was a year of two different halves for the prime London residential market in 2018. During the first half, sales volume and pricing strengthened following a period marked by political uncertainty as well as tax changes. In the second half, prices and activity levels declined as Brexit negotiations moved towards their conclusion and political uncertainty intensified. However, there are signs that pent-up demand is forming, which should underpin future market activity.

There has been little consistency in the performance of prime London residential markets this year. However, needs-based buyers have driven demand across a range of markets. As prices have adjusted, buyers who need to move for family or work-related reasons have been more active in the market, which has benefited the prime central London markets, including Notting Hill and Chelsea. Public realm improvements and the arrival of high-quality, new-build developments have helped drive demand in markets such as Mayfair and Marylebone.

We expect modest price growth to return next year, based on the assumption that the UK and European Union will finalise a Brexit deal. The pent-up demand forming in the sales market could help drive any relief rally. Pricing across prime residential markets in London has now largely adjusted for the impact of higher transaction costs, so, once current levels of political uncertainty recede, activity levels should strengthen.

The trend for needs-driven buyers will continue into next year, which means markets with a higher proportion of those buyers will continue to benefit. It is also worth thinking beyond the political dimension, and factors such as infrastructure will continue to play an important role, with Crossrail due to open next year. The political backdrop will be the primary consideration over the next 12 months. In essence, the more distant the risk of a disorderly Brexit, the stronger the market performance should be”.

Denis Ma
Head of Research, JLL



”The Hong Kong market started the year strongly but escalating trade tensions between the US and China, along with rising interest rates, have dampened market sentiment in the second half. Overall, the rental and investment markets will end the year higher but the housing market has likely peaked.

Looking at leasing markets, the office sector has posted the strongest gains. Supported by a tight vacancy environment and growing demand from co-working operators, Grade A office rents increased 6.2% in 9M2018. On the investment side, the housing market has yielded the highest returns with capital values of luxury properties gaining 12.8% in 9M2018. Housing prices are likely to retreat slightly in 4Q2018 but it is unlikely to affect the overall performance of the sector over the full year.

The local property market is likely to soften against an increasingly uncertain macro-environment as we head into 2019. The city’s red hot housing market, which posted the strongest gains this year, is likely to come under the most pressure. With the new vacancy tax, primary sales restrictions and a supply glut coming when market sentiment has deteriorated significantly, an increasing number of developers are now pricing new units to sell, which in turn is putting pressure on vendors in the secondary market to lower prices. Against this backdrop, we now forecast housing prices to drop about 15% next year.

Growth across the other sectors is also likely to slow as the downstream effects of the US-China trade war and a slowing mainland China economy weigh on merchandise trade flows and business sentiment in the city. In this regard, the rental and investment markets outside the residential sector are likely to be able to tread water and post marginal growth in 2019 but the risks to our forecast will be heavily skewed towards the downside.

With markets nearing their cyclical peaks, investors must focus on secular trends that will help generate returns over the longer term. In this regard, next year may present an opportunity to enter the market, with vendors more willing to negotiate.

In the retail sector, the development of new residential clusters and the enlarged consumer base is drawing investors towards neighbourhood malls. The growth of e-commerce and the completion of the Hong Kong-Zhuhai-Macao Bridge, along with the future addition of a third runway at Hong Kong International Airport will continue to support the demand for high-quality warehousing space. The broader industrial sector also has unique opportunities with the recent government announcement of the resumption of “revitalisation” policies aimed at promoting the higher alternative use of industrial buildings.

As an open economy, Hong Kong remains highly sensitive to developments in the global economy. A messy Brexit, deterioration in US-China relations, a rising interest rate environment and volatile equity markets can all significantly affect market sentiment, which in turn will put increasing downward pressure on the rental and investment markets.

Hong Kong’s property markets are already in the latter stages of the current cycle and downside risks now far outweigh those on the upside. Weaker demand arising from a slowing mainland China economy has the potential to not only affect the city’s important trading sector but also business sentiment, which will lead to a slowdown in demand for office space and retail space as tourist numbers moderate”.


Ben Burston
Head of research and consulting, Knight Frank Australia


”The Australian real estate market performed strongly this year, led by the office and industrial sectors. The residential sector, on the other hand, has experienced divergent performance with a cyclical correction in parts of the market, most notably a decline in average values in Sydney and Melbourne, while the top end of the market has seen continued growth.

Total returns across the commercial markets are likely to hit double digits for the fifth consecutive year, reflecting the strong performance of the office and industrial markets with total returns of around 14% and 12% respectively. Both markets have continued to benefit from yield compression as investors have sought out the depth, liquidity and long-term growth potential of the major Australian markets. The retail sector has also been solid, although it has not witnessed the same level of growth, with total returns of about 8%. The top performers have been Sydney and Melbourne offices, where an upsurge in demand has exposed a severe lack of supply, driving up rents and investment returns.

Australia’s economic growth momentum has provided a strong tailwind for real estate, and the outlook for next year is for sustained growth. More importantly, we anticipate a more even geographic pattern than in recent years, when Sydney and Melbourne have fared best.

Once more, we expect the strongest performance from the office and industrial sectors, which will benefit from ongoing employment growth on the demand side, while the supply side struggles to keep pace.

On the residential front, the market will remain uneven, with average values in Sydney and Melbourne continuing to adjust, while the prime market fares better and Brisbane and Perth benefit from improving economic growth.

In 2019, we expect the industrial market to perform best as it continues to benefit from the structural uplift in demand driven by evolving supply chains and the push to improve operational efficiency and shorten delivery times for the consumer.

The sector has effectively been rerated as a more secure investment proposition, just as it has become more critical for occupiers to modernise and expand their premises and locate themselves strategically adjacent to major transport hubs. We believe that this uplift in demand, and its consequent impact on the market, has yet to fully play out.

The growth outlook would receive a further boost if we see a continuation of the recent upward trend in global commodity prices. This has the potential to result in a more rapid recovery in Perth, Brisbane and Adelaide with an impact across all sectors. In addition, the large pipeline of public infrastructure investment across all states, and particularly New South Wales and Victoria, remains a key driver of growth and a source of new development opportunities.

While the outlook is positive overall, one risk is a potential slowing in the pace of growth of consumer spending reflecting an easing in the pace of employment growth and the flow-on impact of the decline in average house prices on consumer spending patterns. This could create a headwind for the retail sector and weigh on investors’ perception of the sector’s growth potential”.


Desmond Sim
Head of research for Singapore and Southeast Asia, CBRE


”As at 3Q2018, the Singapore economy had grown 2.2% year on year, slower than the 4.1% seen in the previous quarter. Growth was mainly supported by the finance and insurance, manufacturing and business services sectors. While Singapore braces itself for the impact of the US-China trade war, the negative spillover is likely to impact the economy in the latter part of this year and beyond.

Singapore has so far escaped relatively unscathed and the outlook for now still appears mostly positive. It also seems that Southeast Asia is likely to be the biggest beneficiary of this trade war, which could lead to opportunities opening up for Singapore — while some manufacturing companies plan to shift production to Southeast Asia, Singapore could benefit indirectly if their head offices are set up here.

The Grade A office market has already enjoyed a fifth consecutive quarter of rental growth. With the occupancy of the Grade A Core CBD market tightening, leasing demand looking relatively stable and the supply pipeline moderating, landlords have been encouraged to press on with higher rent expectations. This is expected to carry over the next two to three years, albeit at a more measured pace compared to the early part of the rental recovery cycle.

One notable trend is that landlords are actively engaging or incorporating flexible space concepts into their portfolios. Many landlords have either invested in an operator or created their own co-working brand.

However, the same cannot be said for the residential sector. For 1H2018, the Singapore residential price index enjoyed 7.4% growth, which encouraged strong investments in residential land for 1H2018. With property developers all vying to shore up their land bank, a total of S$13.33 billion, or 46 residential sites, were transacted from both private and public sources.

However, on July 6, new cooling measures were introduced to curtail the exuberance of the purchasers’ market and to curb developers’ appetite for land. There was an immediate impact — the pace of growth of the residential price index slowed to 0.5% quarter on quarter for 3Q2018.

In the capital markets, residential transactions accounted for the bulk of investment volume year to date. However, the slowdown in residential sales in 3Q2018 led total investment sales volume to decline 26.6% q-o-q to S$7.735 billion. Nonetheless, office assets continued to be sought after by investors. The overall office investment volume rose 24.2% q-o-q to S$1.308 billion in 3Q on the back of the improving occupier market as well as the diversion of investor interest to the commercial market in the light of the cooling measures impacting the residential sector.

Looking ahead, given sufficient market liquidity, investors are still exploring across geographies and asset classes as part of the portfolio selection process. However, investment sales volume will depend on the availability of assets. With short-term interest rates following the path of bond yields, this is expected to lead to rising interest rates. As a result, some core investors may find it challenging to deploy capital in Singapore as existing net property yields are challenging the yield spread above the risk-free rate.

Specialised assets, however, are gaining more attention. More boutique investors are eyeing shophouses for potential capital appreciation following asset enhancement initiatives”.

Anton Sitorus
Director, Head of research and consultancy PT Property Connection Indonesia 



”In general, the market saw a decline in performance compared with last year. Many factors contributed to the weakening demand — economic volatility, cautious corporate expansion, weak investor sentiment, property prices and over-valued rents in many popular areas — despite some relaxation in government policy and regulations.

In recurring income properties, such as office, retail and hotel, the market suffered from rising vacancies as demand cannot keep up with supply growth, especially in the office sector.

Sales volume in the strata apartment market shrank considerably, which is in line with fewer new launches on the back of slow take-up and tough competition.

In the Jakarta CBD Office, net demand up to 3Q2018 was slower year on year, resulting in vacancies surpassing 25%. Rents in premium and Grade A buildings contracted more than other segments. For non-CBD offices, net demand was slightly higher than last year, but more supply also caused vacancies on a high level of around 25%. Rents remained flat.

As for Jakarta shopping malls, limited retailer expansion continued to put pressure on demand and, accordingly, rent growth. High-end malls had to adjust their rents during this challenging period.

In the Greater Jakarta apartment market, sales dropped considerably with fewer project launches in Jakarta than last year. Developers are now focusing more on the outskirts, such as the Bodetabek region, as available land for new developments is plentiful and affordable — yet overall sales volume was relatively similar to last year’s. There were no changes in prices this year as buyers and investors perceived that prices had gone through the roof.

Modern logistics facilities are seeing a gradual growth in demand, supported by rising household consumption, which requires better, more efficient distribution of goods and services, as well as the growth of e-commerce.

Our forecast for 2019 is not different to this year’s. We anticipate a further decline in the first quarter due to the election that will be held in April. Both developers and buyers are likely to take a wait-and-see approach until after the election results before taking action to execute or delay their expansion plans.

The more challenging situation is also expected if the impact from the tightening global economy and other external factors are channelled through the property market, such as a weaker currency and rising interest rates. However, we expect good things to happen in 2H2019 in view of growing investor confidence post-election as a prelude to a structural recovery in 2020 and beyond.

In terms of market prospects, the apartment and logistics sectors will remain attractive are likely the safest for investors because fundamental demand in both sectors is relatively resilient, supported by strong end-user demand as opposed to the currently weak investor market.

The negative factors we are concerned with are land scarcity and availability, which is causing a high-priced environment. Red tape and unfriendly government regulations are still issues in some areas and can be counterproductive to the market.

However, there are positive factors: (i) infrastructure projects that will enhance the city and the region in the long run; (ii) some relaxation in government policies; and (iii) pent-up demand that has accumulated in the last four to five years”.

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