On the property front, the performance of property markets in Asia was mixed, along with the divergent political and economic developments across the region. The road to recovery for most Asian property markets was choppy as financial difficulties continued to linger and fresh political uncertainties emerged. Nevertheless, Asian property sectors have made gradual but slow improvements, with investment opportunities existing within certain segments.

The office sector led the rebound in property markets across the region. The rapid expansion of financial institutions, IT and telecommunications companies, and new e-business start-ups led to strong office demand and falling vacancies.

In line with the strong leasing demand, office rents in most of the major Asian cities registered strong growth. In particular, prime office rents in Hong Kong grew an impressive 56.5%. In Singapore, strong demand coupled with a shortage of prime CBD office space drove CBD rents up 28.3%. Office rentals also increased in Kuala Lumpur (4.6%), Jakarta (24.3%), Shanghai (1.2%) and Beijing (41%). On the other hand, the faltering economic recovery in Thailand resulted in relatively flat growth while the political crisis in Philippines led to a decline of 22.4% in Makati’s office rents.

While the regional office sector continued to strengthen, the regional residential sector did not fare as well. Private residential markets in Singapore and Hong Kong slowed down in 2000 after the impressive rebound in 1999. Despite sound fundamentals, prices flattened out in Singapore and dropped 13% in Hong Kong over concerns that the US economy was slowing down.

Rapid expansion of the office sector led the rebound in property markets across the region.