Here's proof that the APAC real estate investment market is finally recovering

Green shoots are beginning to appear in some markets across Asia Pacific, according to Colliers.

Colliers’ APAC Cap Rate Report | Q4 2023 found that despite the low transaction environment persisting, five of 19 cities surveyed across the region saw upward quarter-on-quarter movement in cap rates across all sectors. Each of these markets were located in Australia – Adelaide, Brisbane, Canberra, Melbourne and Perth.

While owners, investors and occupiers remained cautious about real estate investments, and due diligence processes had lengthened, there were positive signs emerging across the region. 

Dorothy Chow, Executive Director of Valuation & Advisory, Asia said: “There are signs that interest rates have peaked in some markets, resulting in a more positive sentiment towards investments. Consequently, we expect to see more market activity and a gradual recovery in 2024.”

Specifically in Hong Kong where interest rate continues to rise and land at 5.65% in Q4 2023, transactions were mainly driven by end-users and local investors. Hannah Jeong, Head of Valuation & Advisory Services, Hong Kong commented, “The US Fed Rate is anticipated to reduce from H2 2024, leading investors to engage in bottom fishing. Retail rental performance and occupancy have maintained at a healthy level thanks to a strong domestic consumption, hence the cap rate saw an upward movement QoQ in retail asset.”

For more information and a breakdown of cap rates across the Asia Pacific region, read the full report HERE.