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Asia Pacific Cap Rates Snapshot | Q3 2022

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Business activities have started to get back to some semblance of normality in most markets across Asia Pacific

Business activities have started to get back to some semblance of normality in most markets across Asia Pacific. While the era of consistent office yield may appear to be over, there are signs of cap rates rising in some markets.  Overall retail yield is anticipated to remain stable in the near term. Industrial sector remains a relatively low-risk option for investment in most APAC markets. US dollar has risen by nearly 15% this year against some of the world’s most traded currencies. This amplifies the demand for cross-market real estate investment in some markets such as Japan. The depreciation of the yen and the Bank of Japan maintaining its low interest rate policy has created a strong appetite for real estate investment by foreign investors. 

Key Highlights in Q3 2022:

Office Sector
  • Some Investors in China are generally holding conservative views and are concerning over the softening of the economic conditions.
  • In Manila, new supply coming online exacerbated the already high vacancy rate in the office sector.  Business Process Outsourcing (BPO) allowed to extend their work-from-home arrangement which muted the office expansion plan.  Office rents continued to adjust downwards, while prices were more resilient has resulted in a slight compression on the yield.
  • There was a slight upward QoQ cap rate movement in office sector in Auckland and some Australian markets. The upward interest rate cycle, which was driven by inflation, changed the market conditions.   
  • In Australia, selective capital will flow towards high quality of premium office assets.  Hence, buyers and vendors continued to work through a re-pricing discovery phase during this round of interest rate cycle. 

Retail Sector
  • Retail sector was hit by the strict COVID measures in China. Beijing cap rate showed signs of edging up.
  • Retail sector is expected to recover when international travel in many cities roars back to normal, although it may take a while to go back to its pre-COVID level.
Industrial Sector
  • There was substantial logistic space pipeline in Beijing, Shanghai and nearby cities putting pressure on the rental market.  
  • In Manila, there was some observable downward movement on warehouse rents as vacancy rate has increased due to global economic concerns.
  • In Seoul, industrial cap rate trend slightly upward over the past quarter and office yield is expected to follow in a rising interest rate and high inflation environment. 
  • Dearth of transactional evidence in all markets covered in this report across Australia and New Zealand. Market sentiment and external economic factors have placed upward pressure on yields.  Some of this pressure is offset by the record low vacancy and unprecedented rental growth at present.

Download the latest APAC Cap Rates Snapshot | Q3 2022 below. For more real estate advisory insights across Asia Pacific, reach out to our experts CK Lau and Dwight Hillier.

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Asia Pacific Cap Rates Snapshot | Q3 2022

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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:

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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Dwight Hillier

Managing Director | Valuation & Advisory Services, Strategic Advisory & Healthcare & Retirement Living

Valuation & Advisory Services


I am responsible for the oversight and management of Valuation & Advisory Services; Strategic Advisory & Healthcare & Retirement Living  businesses in Australia.  Ensuring Colliers remains best in class providers in their respective markets. 

Managing Director, Valuation & Advisory Services 2013 - Present
National Director, CBD Commercial Valuation, Sydney CBD Office 2006 - 2013
State Director, Consultancy and Valuation, Sydney CBD Office 2003 - 2006
Associate Director, Sydney CBD Office 2002 - 2003
Senior Valuer, Sydney CBD Office 1998 - 1999
Valuer, Sydney West Office 1995 – 1998


Some of the more prominent clients that I regularly undertake national valuation appointments from include The GPT Group, AMP Capital Investors, DEXUS, Brookfield, and Lendlease.

Some of my more recent valuation instructions of Premium and A grade commercial office assets undertaken are as follows:-

‘Governor Phillip’ & ‘Governor Macquarie Towers’, 1 Farrer Place, Sydney
‘RBS Tower @ Aurora Place’, 88 Phillip Street, Sydney
‘Darling Park’, 201 Sussex Street, Sydney
‘Grosvenor Place’, 225 George Street, Sydney
1 Bligh Street, Sydney
120 Collins Street, Melbourne
530 Collins Street, Melbourne
8 Exhibition Street, Melbourne
‘Bourke Place’, 600 Bourke Street, Melbourne
One One One Eagle Street, Brisbane
1 William Street, Brisbane
Central Plaza I, II & III, Brisbane
‘Bankwest Tower’, 108 St Georges Terrace, Perth
‘Brookfield Place', 125 St Georges Terrace, Perth
‘Ernst & Young Centre’, 12 Mounts Bay Road, Perth


Prior to joining Colliers, I worked within the Research Department of the Property Council of Australia (PCA), then with a boutique firm of Valuers & Land Economists, where I was involved in the valuation of residential property predominantly for first mortgage security purposes, as well as commercial and retail rental advice.

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