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Asia Pacific Cap Rates Snapshot | Q1 2022

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Demand for industrial assets across Asia Pacific continues to outstrip supply; investors conservative toward retail market.


Eight out of the 20 cities in our survey across Asia Pacific (APAC) saw quarter-on-quarter (QOQ) movements.

Demand for industrial assets across APAC continues to outstrip supply, which has seen further yield compression in this sector, while investors remain conservative toward the retail market. Yield compression in the office sector was seen in Australia.

Key Highlights in Q1 2022:


  • No major transactions were recorded for Q1 in Beijing and Shanghai for both the retail and office sectors. In contrast, investors continue to deploy capital into logistics facilities, supporting demand for this asset class in China. The mobility restrictions in Shanghai since the latter part of Q1 have impacted normal business activities, but have also spurred logistics demand to new heights. The logistics market will continue to draw strong investor interest.

  • Office transactions in Sydney and Brisbane have continued to show cap rate compression, and this reaffirmed the attractiveness of prime assets in the market.

  • High levels of competition for prime grade assets in Auckland have mitigated the impact of higher interest rates with yields generally running flat.

  • Interest remains strong in industrial assets in Singapore and capital values have been rising faster than rents, resulting in cap rate compression.

  • The overall movement in cap rates in Bengaluru and Mumbai was within a narrow range. Investors generally remain conservative across different sectors with an improvement in sentiment towards the industrial segment, especially for warehouse and data centre

Download the latest APAC Cap Rates Snapshot | Q1 2022 below. For more real estate advisory insights across Asia Pacific, reach out to our experts CK Lau and Dwight Hillier.


Asia Pacific Cap Rates Snapshot | Q1 2022

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CK Lau

Managing Director | Hong Kong & Managing Director | Asia CVAS

Managing Director's Office | Hong Kong

Hong Kong

CK Lau is the Managing Director | Hong Kong and also leads the Valuation & Advisory Services business as Managing Director | Asia.  He has over 30 years’ property experience in valuation, real estate consultancy and investment sales in Hong Kong, mainland China and the Asian region. 

His expertise includes development consultancy; government lease modification application and premium negotiations; investment and development sites sales; litigation valuation advice and expert witness in the High Court/Lands Tribunal/arbitration; portfolio valuations; REIT property advice; rental determination; and valuation due diligence services.

He writes regularly on topics relating to land use and development in Hong Kong since 2010. His collection of over 200 articles in the Hong Kong Economic Journal and other publications can be viewed through the following link:

https://lauchunkong.wordpress.com

CK is also a member in the following publications:

• “The HKIS Valuation Standards 2017 & 2020”

• “HKIS Guidance Notes on Valuation of Development Land” published in 2016

• “Surveyors acting as experts in commercial rent determinations” Joint guidance note Hong Kong prepared by the HKIS and RICS Hong Kong” 1st edition 2015

 

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