2023 Asia Pacific Real Estate Market Outlook
Trends to Watch
Wait-and-see approachThe cautious attitude that pervaded among commercial real estate investors in H2 2022 will persist until there is firm evidence that interest rates have peaked, which is likely to emerge in Q2 2023. Purchasing is expected to pick up significantly in the second half of the year.
Insufficient yield expansionWhile yields are forecasted to expand further given that interest rates will not peak until mid-2023, the magnitude will be insufficient to ensure a return to positive carry. Overall, CBRE expects that cap rate expansion in Asia Pacific will lie between the range of 75-150 bps during this trough to peak cycle.
Timing will be keyWith this year marking a turning point in several major cycles including peak interest rates, mainland China’s re-opening, and a return to brick-and-mortar shopping and overseas travel, there will be a brief window of opportunity for investors to acquire assets at attractive prices.