Delayed rate cuts push back Asia Pacific commercial real estate investment recovery to late 2024 and early 2025

CBRE’s latest survey reveals that capitalization rates across property sectors in Asia Pacific are expected to continue rising over the next six months due to delayed rate cuts and investors’ limited risk appetite.

These trends have impacted purchasing activity in first quarter 2024, resulting in a 14 percent year-on-year decline in Asia Pacific commercial real estate investment volume to $24 billion. Japan, with its low cost of finance and solid market fundamentals, has replaced mainland China as the most active investment market, accounting for 30 percent of the total regional volume. Mainland China saw a 23 percent year-on-year decline in investment volume, with most acquisitions being completed by domestic corporations.

While investment remains robust in Japan, India and Singapore, the recovery in other major regional markets is likely to be delayed to late 2024 or early 2025, as investors remain cautious due to the delayed interest rate cuts. The rebound is ex