Israel's commercial property slowdown relatively moderate

Real Capital Analytics: First half global property sales were half the total of the corresponding half, but sales in Israel down just 6%.

The global credit crunch and economic slowdown halved sales of commercial real estate in the first half of 2008 compared with the first half of 2007, when neither were a factor, according to a report by Real Capital Analytics on global capital trends. The report notes that sales in Israel fell by just 6%.

Real Capital Analytics operates a database of property sales, and is the source of data for the National Council of Real Estate Investment Fiduciaries (NCREIF) in the US. The report examined 84 countries worldwide. In the first half of 2008, there were 9,000 property sales for a total of $306 billion.

The latest report states, "Dramatic shifts in the capital flows for commercial property became evident in the first half of 2008. Tokyo overtook London and New York as the most active sales market as investors began favoring Asian markets." There were 43% fewer property sales in developed markets in the first half of 2008 compared with the corresponding half of last year, whereas sales in emerging markets rose by 60%. Property sales in emerging markets accounted for 25% of all property sales in the first half of 2008, compared with 10% in the first half of last year.

Property sales increased in 35 of the 84 countries covered, and most of the increases were in emerging markets.

Real Capital Analytics noted one exception to the drop in property sales - sales of land.

Leading developed markets were the hardest hit in terms of property sales. Sales were down 65% in Germany in the first half compared with the corresponding half, sales in the US were down 63%, and sales in the UK fell 57%.

In Israel, sales were down 6% in terms of volume, despite a 27% increase in the number of transactions. Real Capital Analytics included only large deals in its analysis of the Israeli market: it counted 28 large sales of commercial property for a total of $853 million in the first half of 2008.

Published by Globes [online], Israel business news - www.globes-online.com - on August 28, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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