November 18, 2023 – CBRE Asia Pacific Cap Rate survey for the third quarter showed that investor risk appetite remains low amid a delayed recovery in investment activity. A majority of respondents expect a recovery from Q2 2024 onwards with the potential for an interest rate cut in the first half of 2024 seen as unlikely, the report said.
Cap rates are set to expand across the Asia Pacific, reflecting a prolonged high-interest rate environment, and as re-pricing lags behind the US and Europe, the report said.
Other key highlights from the survey include:
- Selling pressure persists across most of the region, with the primary exception of India which is receiving increased buying interest from investors. Most investors – excluding private investors and institutional investors/LPs – also have higher intentions to sell than in Q1 2023.
- The price gap is widening for assets with strong fundamentals, such as multifamily, institutional-grade modern logistics facilities, prime shopping malls, cold storage and data centres.
- While institutional-grade logistics remains the most popular sector for investors, interest in retail has increased. Slow re-pricing is prompting investors to seek alternative or niche sectors, with real estate debt strategies gaining traction among alternatives.