Markets and Operating Environment
Global economic environment and trends
The global financial crisis essentially triggered by the collapsing US real estate market was the key factor driving global economic trends in 2008. Banks' confidence in one another was severely damaged, resulting among other things in a shortage of capital. A number of governments have now launched rescue packages comprising guarantees and loans with the aim of stabilizing the international financial and economic system. In addition, economic stimulus programs have been announced and decided worldwide.For construction and other industries, this means changes affecting general refinancing requirements. In addition, capital market conditions pose a particular challenge for project development activities and concessions business. It remains to be seen what changes will occur, both in financing development projects and on the investors market in 2009. Financing is a particularly important issue in the concessions business, as contract terms tend to be long. Future project financing conditions will have a decisive influence if and when new projects are implemented. On the other hand, the economic stimulus programs that have been announced are expected to benefit the construction industry in particular. These programs provide for much higher investment in infrastructure.
Global economic growth was 3.4 percent last year, significantly less than originally forecast for 2008. Despite the government measures, it cannot be assumed that the financial crisis is definitely coming to an end, making any forecast for 2009 highly uncertain. The International Monetary Fund (IMF) is anticipating global economic growth of around 0.5 percent.
Growth will vary considerably from region to region. Experts are expecting the US economy to contract by 1.6 percent in 2009 after growing by 1.1 percent last year. Much will depend on whether the rescue measures decided upon have an effect and credit flows are restored.
The Asia region was also affected by the turmoil, but to a lesser extent. The economic slowdown in a number of industrialized nations is now restricting export opportunities, however. After growing by nine percent in 2008, China"s
Following healthy growth of 3.1 percent in 2007, the economic area comprising the EU 27 expanded by just 1.3 percent in 2008, with the trend sharply down in the second half of the year. The IMF is expecting this negative trend to continue during 2009. It is currently anticipated that the economy will shrink by 1.8 percent.
In Russia too, there is uncertainty about how the economy will trend. In 2008, the Russian economy grew by another 6.2 percent, but making a prediction for 2009 is difficult given the shorter supply of capital and fears that a possible real estate bubble may burst. As investment activity within Russia is declining, the IMF is expecting GDP to fall by 0.7 percent, a surprisingly sharp drop for the region.
Markets served by HOCHTIEF
Project development
The past financial year was a year of two completely different halves for the real estate markets. Although the markets were completely unaffected by the international financial crisis during the first half of the year, the crisis worsened from September 2008 onwards, with the fallout particularly severe in the fourth quarter.The rental market turned in a satisfactory performance overall in 2008. According to industry experts Jones Lang LaSalle, take-up in Germany's office and warehouse segments was slightly down on the record levels reached in previous years, by 8.0 percent and 7.0 percent respectively, only because of a weak fourth quarter. Vacancy rates in major real estate markets such as Hamburg, Frankfurt and Munich fell to all-time lows. In a welcome development, rents in Germany continued to rise, particularly for high-quality properties. Like the German market, Eastern Europe also saw a satisfactory trend in rents. Take-up declined only slightly. However, the downturn that began in the last quarter of 2008 will continue in both Germany and Eastern*
