Asia Pacific Cap Rate Survey Q3 2022

CBRE professionals in Asia Pacific see that a majority of investors have become more risk averse amid the rising interest rate environment. While investors are increasingly concerned about the cost of financing, rate hikes in Asia Pacific are expected to be relatively less frequent.

Cap rates across all sectors have expanded across most Asia Pacific markets, with a majority of respondents to our latest Asia Pacific Cap Rate Survey expecting cap rates to continue to move out.

Other key highlights from the survey include:

• Logistics properties remain keenly sought-after, as well as prime core offices and hotels.
   
• Real estate debt has moved into the top three preferred alternative sectors, alongside data centres and healthcare-related assets.
   
• Investors continue to place a strong emphasis on income-related factors such as rent roll stability, tenant quality, and potential rental growth.
   
• Value-added strategies remain favoured by investors, with preferred approaches including asset enhancement initiatives and taking on leasing risk to achieve higher returns despite higher financing costs.