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Funding gap to emerge in Asia Pacific
There is currently $177 billion of outstanding senior commercial real estate debt in Asia Pacific, with a funding gap of $5.8 billion set to appear in markets between 2023 and 2025, according to a May 2023 report from CBRE, Analysing the Funding Gap: A Bird’s-Eye View of the Asia Pacific Commercial Real Estate Debt Market. The firm utilized investment volumes as a proxy for lending.
According to the report, Australia faces the biggest funding gap by total volume between 2023 and 2025, followed by Japan, South Korea and China. In Australia. While cap rate expansion and debt maturity in 2024 are concerns, from 2021 to 2022, many Australian REITs extended their loan maturities and offset any interim refinancing risk. South Korea will face more immediate pressure, with 73 percent of the total funding gap in this market surfacing in 2023.
Office assets are likely to witness the greatest funding gap of any sector, primarily due to projected declines in capital val