Q1 2025 Asia Pacific Cap Rate Survey (CBRE) 22 May 2025
CBRE conducts the Asia Pacific Cap Rate Survey with our capital markets brokers and valuers every six months to obtain insights into current capital markets trends and sentiment along with the latest cap rate movements across individual markets and sectors. This report summarises the survey's key findings.
Below are the key highlights:
- Commercial real estate investment got off to a strong start this year, rising 11% year-on-year to US$33 billion in Q1 2025 on the back of declining interest rates and asset repricing.
- Bifurcation in cap rates was observed across the region. Australia’s shopping malls experienced cap rate compression, while cap rates in Greater China continue to experience expansion pressure.
- In response to tariffs, some 60% of respondents expect investors to reassess the pace of purchasing activity. Mainland China, Hong Kong, and Singapore investors were extremely concerned about the impact of tariffs, while those in Korea, Australia, India, and Japan were somewhat concerned.
- Private (28%) and institutional (12%) investors continued to display the strongest buying intentions. Buying intentions for REITs and real estate funds strengthened from six months previously.
- Net buying intentions were highest in New Zealand (77%) and Australia (48%). Japan attracted the strongest interest from cross-border investors.
- Elevated yields / favourable pricing (63%), potential for rental uplift (44%) and healthy or improving occupancy/rent roll stability (36%) were named as the top three opportunities to improve investment returns.
- Interest in multifamily & build to rent increased significantly (44% vs. 34%) from six months ago, with Japan, Greater China and Australia the main markets of interest. Demand for neighbourhood shopping malls (24% vs. 12%) also picked up from the Q3 2024 survey.
- Data centres (63%) were the clear favourite among alternatives.
