Asia-Pacific all-property capital values showed signs of stabilisation, with a milder 2.5% y/y decline in Q2. Still, the upturn in both investment activity and capital values will be weaker than in any previous cycle, predominantly due to risk-free rates staying elevated at “new normal” levels in the coming years, alongside only modest growth prospects.
In 2025-27, retail and industrial in Australia, as well as offices in Korea, are set to deliver the strongest total returns, supported by tight vacancies and solid demand. We think Hong Kong will remain the laggard across all sectors amid its ongoing economic slowdown.
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