Cap rates in the Pacific will reach a new low, reflecting recent interest rate cuts. The indicative cap rate range for the Pacific tightened by 25 bps to 50 bps in Q2 2019.
Cap rates in Asia will hold firm but Shanghai and Shenzhen will experience higher yield expansion pressure due to greater leasing risk.
Lending will remain stable. However, there will be short-term movement in the interest rate spread charged on top of the reference rate for commercial property lending in the Pacific.
Investors are more cautious amid the uncertain economic outlook. CBRE Research retains its forecast of a 5%-10% decline in total investment turnover in 2019. This aligns with the majority view of a decline in buying activity in H2 2019.