In a 2008 Macau real estate market review, Jones Lang LaSalle stated that the transactions of stores and commercial properties are affected by the financial crisis and expects rental prices to decline by over 10% this year.

The first three quarters of 2008 registered an increase in both the sale prices and rental prices of stores. The financial crisis took its toll in Q4, however, forcing them to fall by 11.8% and 4.6%, respectively. While overall capital values of stores declined by 1.6%, rental prices nevertheless registered a 5.8% growth in 2008.

According to Jones Lang LaSalle, with some retailers putting expansion plans on hold or even scaling down their businesses, rental prices for stores are likely to plunge 15-20%, with sale prices dropping more than 20% this year. Nevertheless, thanks to the suspension of a few major projects, average rentals might pick up a little.

The sale prices and rental prices of Macau commercial properties saw a 16.9% and 4.2% decrease, respectively, in Q4 2008 subsequent to successive growth in the first three quarters of the year, contributing to a 2.6% and a 1.1% annual drop in stated prices.

Jones Lang LaSalle envisages that scaling down businesses or downsizing is likely to take place in some local companies amid the ongoing financial crisis, which the company believes will dampen demand for commercial property and lead to increased vacancies. Under such circumstances, the rental and sale prices of commercial properties in Macau are likely to decline by 10-15% and 10%, respectively, this year.

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