New research from Colliers has found the office sector recorded the most movement in cap rates in the past quarter in Asia Pacific while geographically, the Brisbane, Manila and Sydney markets saw the most movement quarter-on-quarter.

Colliers’ Q2 2024 APAC Cap Rates report found that, region-wide, the sector recording the greatest movement in cap rates was the office sector. Some of the markets with the biggest movement in office cap rates included Auckland, Melbourne, Mumbai, Seoul and Sydney.

CK Lau, Colliers’ Managing Director of Valuation & Advisory Services, said sales transaction volumes across the APAC region remained relatively low in Q2, with lease transactions accounting for the majority of activity. 

“Interest rates have stabilised, though the anticipated easing has yet to materialize,” Mr Lau said. “A gradual easing is expected in the second half of 2024, which could stimulate investment activity.”

The report found existing inventory and new supply in the office sector caused occupancy pressure in Hong Kong, Manila and Shanghai. In contrast, Seoul and Singapore have relatively limited supply with persistent demand.

“Corporate or strategic institutional investors are emerging as significant players for office market in Seoul, while distressed and discounted asset transactions dominated the property sales market in Hong Kong, primarily driven by end-users and local investors,” Mr Lau said.

“Across the Pacific, the Reserve Bank of New Zealand has maintained the cash rate at 5.5%, but there is speculation that interest rate cuts may come sooner than anticipated. This is expected to underpin an uplift in sales activity in the second half of 2024. 

“Office, industrial and retail transactions remain at low levels across Australia, with metrics and values continuing to soften. However, investment sentiment in Brisbane is strengthening, particularly for industrial assets, driven by both domestic and offshore capital.”

To read the full report, click HERE.

For further information, please contact CK Lau, Managing Director of Valuation & Advisory Services, Colliers as the details below.