Updated Pacific Market Outlook - April 2026 edition

Since we published our Pacific Market Outlook 2026 report in January, bond yields and construction costs forecasts have increased materially.  We have updated the report to reflect these changes and there will be more to come as the impact of factors become more explicit/permanent. 

What’s changed in the report:

• Fresh view on interest rates and bond yields
• Cap rate expectations have moved higher by 25-35bps for Super Prime Industrial, ~25bps for Prime office and  20-25bps for Regional malls.  Living sector could see flat/minimal cap rate movement.
• Construction cost outlook captures scope for 18% growth between 2026-2027.
• Transaction volumes have more modest growth expectations for 2026.
• Total return expectations continue to shift away from cap rate to rent growth.