GLOBAL - Real estate markets are currently said to be in "excellent shape" and will remain moderately positive for 2007 before falling off next year, according to a report published last week by Swedish bank SEB.
Despite strong investor demand sustaining the current boom, especially in Europe and Asiae the mid-sized bank warned of growth "on a somewhat more moderate scale" for 2007.
This year "will be the year of the office markets", claimed the report, with the introduction of REITs in some European markets driving additional investment.
SEB claims boom markets will include Asia and Europe – especially Germany.
However, a report from Deutsche Bank property subsidiary RREEF last week claimed investors had "become unduly optimistic" about the German office market because, encouraged by strong macro growth, falling vacancy rates and rising rents in some cities, they have ignored continuing structural problems.
In contrast, SEB forecasts the German property boom will continue in 2007, with the emphasis moving from retail and residential to office.
Asia will meanwhile continue as a "global growth centre" for real estate alongside other sectors in 2007. With 8% economic growth, driven by consumer and overseas demand, the fact the region comprises real estate markets of various stages of maturity and transparency "is exactly what provides interesting investment and diversification possibilities", the SEB report stated.