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APAC Cap Rates Report | Q4 2020

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Largely muted cap rates across Asia Pacific.


Uncertainty surrounding COVID-19 continued to put potential transaction activity on standby mode in Q42020. We saw largely muted cap rate fluctuations across the region.

Key Highlights in Q4 2020:

  • In India, notable exceptions included dips in industrial cap rates as the region-wide proliferation of e-commerce for both F&B and retailing generates sustained demand for warehousing and logistics facilities.

  • Mumbai’s retail cap rates edged upward as drops in rental and vacancies exert downward pressure on asset values.

  • Elsewhere in Manila, we witnessed a drop in rental values which are yet to be reflected on asset values.

  • In Australia’s office sector, we expect modern assets with long term leases to continue showing resilience in value as investors focus more on low-risk buying opportunities.

  • While the underlying appetite for office assets in Australia remains healthy, transaction volumes is temporarily being affected by international travel restrictions which has impeded upon site visits. Further, limitations brought about by the foreign investment approval process has posed uncertainties on inbound capital flows. However, recent inroads to policies have been made which appear optimistic.

Overall, we believe that varying expectations on economic outlook has translated into mismatch between buyers’ and sellers’ price expectations.

The gradual restoration of activity will drive capital back to office, retail and industrial sectors, in turn affecting their cap rates later in 2021.

Download the latest APAC Cap Rates for Q4 2020 below. For more insights on this report and for real estate advisory insights across Asia Pacific, reach out to our experts CK Lau and Dwight Hillier.


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APAC Cap Rates Report | Q4 2020

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Hong Kong SAR China

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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