Outstanding senior commercial real estate debt in Asia Pacific totals at least $257 billion, with a funding gap of $8.4 billion expected between 2024 and 2026. This is a much narrower gap than investors in the other major regions, according to CBRE.
The debt funding gap in Asia Pacific is relatively small, compared with Europe ($191.4 billion) and the United States ($157.3 billion), owing to the limited repricing in Asia Pacific when compared with other regions. This limits opportunities for distressed assets and nonperforming loans (NPLs) in the region. Australia faces the largest funding gap at $4.6 billion, followed by mainland China at $2.9 billion.
The office sector is expected to face the most significant gap, with further asset repricing anticipated throughout the remainder of 2024. This repricing will particularly affect secondary properties that are currently out of favor with tenants. However, distressed office acquisitions will be limited in selective market
