In our latest research report — The U.S.- China Trade Dispute Report — we assess the implications for investment property capital flows and occupier property markets of the trade dispute between the U.S. and China. We provide an overview of the key developments in the trade dispute, with an assessment of the impact on the U.S., China and global economies. We also highlight the potential impacts of the dispute on office leasing markets in Asia and the industrial leasing market in the U.S.

Key Takeaways

• Washington has resolved to address what it regards as imbalanced China-U.S. trade flows. It is impossible to predict the outcome of trade wars once they start, and the impact of renewed tensions on the U.S. economy would be material, although the hit to Chinese GDP would be greater.
• Trade tensions appear to have already impacted property capital flows. Despite high activity by Singapore capital in 2018 and South Korean capital this year, RCA data show that Asia-to-global property investment fell 33% year over year in H1 2019.
• In Asian office leasing markets, while South China will initially feel a greater impact from trade tensions due to its focus on technology, confidence is also falling in Tier 1 cities elsewhere in China.
• Unlike in Asia, the U.S.-China trade tensions are likely to have a minimal impact on U.S. office occupiers. However, they may undermine demand for industrial property, especially in port and manufacturing markets. Notably, demand from manufacturing occupiers, which accounted for nearly 13% of total industrial transactions in the U.S. in H1 2019, could decline, hurting regions in the Midwest and Southeast.

For more details, download the full report here.

This report was a joint effort by the Colliers Asia and U.S. offices with authors Andrew Haskins, Executive Director of Research | Hong Kong and Stephen Newbold, National Director of Office Research | USA