LONDON: The worst of the global commercial property meltdown is over, although the recovery will be uneven as rebounding markets in Asia and Europe contrast with more subdued US conditions, a report said on Oct 21.

The rally is supported by the improving global economy, investor sentiment, market liquidity and corporate balance sheets, Jones Lang LaSalle Inc said in the report.

Asia's real estate market is leading the rebound, benefiting from a quicker-than-expected economic turnaround, while Europe is also seeing stronger investor interest, the property advisor said.

"In contrast, US commercial property continues to struggle under the weight of weak corporate demand, concerns about the size of potential loan losses and worries over the willingness of lenders to recognise asset value declines," it said.

In Asia, positive sentiment in the housing market has spilled over to the commercial property sector, with China and Hong Kong seeing strong increases in investment activity fuelled by liquidity from Chinese investors, Jones Lang said.

Investment sales in Europe also gained momentum with volumes expected to total more than €60 billion (RM305.73 billion) by year-end, although much of this is confined to prime properties in the more transparent western European markets, it said.

Central London's office market remains busy, the report said, with £5.3 billion (RM30.57 billion) of properties changing hands in the first nine months of the year.

In the US, job losses continue to hit the office market and foreign investment was virtually nonexistent this year, although there are some signs of interest from German property funds.

Year-to-date, US transaction volumes for large office, industrial, retail and apartment properties was US$29 billion, 75% lower than the same period in 2008, the report said.

Jones Lang predicts banks in the US and Europe will increasingly seek longer-term solutions to problem real estate holdings, leading to large-scale portfolio restructuring rather than sporadic asset sales. – Reuters