Tighter yield environments are prompting investors to take on a higher risk appetite compared to Q1 2021, according to CBRE’s Asia Pacific Cap Rate Survey which tracks indicative cap rate and pricing trends and evolving investor preferences.
Investors chasing higher returns are undertaking asset enhancement initiatives, repositioning their assets for different uses, and taking on leasing risks.
Logistics assets were the most sought-after by investors, followed by Grade A offices in prime locations, data centres, and multifamily.
Assets related to healthcare, cold storage and data centres remain the focus for investors, said CBRE.
Buyers and sellers are mismatched on pricing expectations. Sellers are holding firm amid steady market recovery but buyers are seeking further discounts on office and retail.
Amid uncertainty about the duration of the pandemic, the economic outlook is investors’ primary concern in 2022. Concerns over interest rate hikes and high inflation are limited.
Investors’ top concerns vary across markets:
Singapore – intense competition pushing up capital values faster than expected, and slow reopening due to new waves of COVID;
Mainland China – Weaker than expected rental income growth;
Hong Kong SAR – Weaker than expected rental income growth, and slow reopening due to new waves of COVID.
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