APAC Cap Rates Report | Q2 2020

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The retail market has generally continued to have weak performance due to the ongoing effects of COVID-19, with increases in cap rates from 0.25% to 0.5% in over 50% of the APAC cities covered in this report. 

In some Asian cities, malls have been closed for months with only essential stores such as supermarkets and pharmacies open for business. Despite the observed flat cap rates in Hong Kong, the majority of its retail transactions were on the higher range when valuated.

Lockdowns and social distancing in Australia also led major shopping centres in CBDs experiencing a significant drop in customers. Higher tenant incentives and pro-longed letting-up periods coupled with decreasing rentals have resulted in lower values in the retail market across Australia’s major cities in the last quarter.

The office sector across APAC remained relatively stable, with only Beijing, Shanghai and Manila each observing a 0.5% increase in cap rates. However, unlike most other markets, Yangon saw downward movements across all three sectors, reflecting the continued demand for quality assets in emerging markets. In Yangon, the retail and office sectors remained strong and rental rate adjustments led to minimal pressure on investments. 

Across the APAC region, cap rates in the industrial sector have generally remained flat and in some case experienced tightening. The industrial/logistics sector has proven to be most resilient and has performed well in the current economy. This is the result of a boom in e-commerce and virtual meetings, creating a surge in demand for storage spaces such as warehouses and data centres. 

Please contact CK Lau and Dwight Hillier if you have any queries.  


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APAC Cap Rates Report | Q2 2020

Download Report