Cap rates across the office, retail and industrial sectors showed markedly more movement last quarter.
Cap rates in many major industrial markets across Asia Pacific moved in a downward trajectory, including cities in China, India, Japan, Australia and New Zealand.
This underscores a greater pull by investors towards logistics assets as a safe haven amid ongoing uncertainties.
Key Highlights in Q1 2021:
- In Australia, all markets studied showed a dip in industrial cap rates on the back of stronger investor appeal brought about by longer lease terms. Stronger investor demand is also bringing industrial cap rates down in Tokyo, Shanghai and Beijing. In Auckland, vacancy rates are at about 2%.
- Retail cap rates across Asia Pacific remained mostly flat with a few exceptions – Beijing, Shanghai, Mumbai, Melbourne, Sydney and Brisbane. The higher income risk from this sector has hampered demand for this asset class.
- China and India saw office cap rates trend upward due to several reasons, including softening demand in Beijing and Bengaluru.