According to DTZ’s latest Foresight report, Asia Pacific economies are experiencing a strong rebound after a short period of negative growth. Consequently, rental forecasts for the three major property sectors are projected to return to positive growth in 2010.

Demand for prime office space is expected to recover in coming quarters, as vacancy rates fall back from 2009 peaks. Region-wide rental growth is only about 2% in 2010 but will pick up sharply from 2011 onwards to 6-8%. Rental growth will be strongest in Chinese cities and other markets that are closely tied to the mainland. India’s IT centres and major Australian cities are also expected to perform well over the period.

The report also stated that China and India have the strongest consumer sector in the region. In China, retail demand has been supported by stimulus and savings, and now increasingly by jobs and income growth. Indian cities exhibit good rental growth prospects as well as high initial yields.

Industrial rents are bottoming out after deep cuts in 2009. Going forward, demand will benefit from a sharp V-shaped recovery in the export sector. A pickup in trade and manufacturing, as well as the commodities cycle, will support industrial prospects over the period.