During Q1 2010 commercial real estate markets across the world have shown clear signs of stabilisation and recovery with capital values also appearing more stable. Attention is focused on prime properties with secure income streams, particularly in major cities such as Hong Kong, London, New York and Paris, according to ING Real Estate Investment Management.

Timothy Bellman, global head of research & strategy at ING REIM said: “There have been clear signs of markets for prime properties stabilising and recovering in the first five months of the year. Theyre doing better than we expected in our Global Vision annual strategy paper at the end of 2009, but we are now reaching a crucial turning point for the upside. Our analysis suggests that real estate values are not yet being affected by the sovereign debt problems in Europe and we think investors may see returns at the upper end of their expectations in the next few years.”

ING Economics predict that the global economy will have a growth rate of +3.5% in 2010, with the US expected to grow by +3%, the Euro-zone by +1.2%, Japan by +2.6% and China by +11%. The Euro-zone growth has been reduced by -0.2% due to the uncertainty arising from the Greek sovereign bond crisis.

Bellman said: “ Following the greatest global financial and economic crisis since the 1930s, it is axiomatic that the outlook is not without risk and uncertainty. A very clear risk specific to real estate is the scale of real estate debt that needs to be refinanced over the coming few years. In this context, we believe real estate investors with a low risk appetite will likely wish to continue to focus on the retail and industrial sectors which tend to exhibit more stable returns in a downturn and outperform in the early stages of a recovery. Investors with a slightly greater appetite for risk may wish to note that in our latest forecasts we expect the recovery of office markets to be a little sooner and a little stronger than we previously thought.”