CBRE - Asia Pacific Investments, 2Q 2023

CBRE's report on the Asia Pacific real estate market in the second quarter of 2023 revealed different trends in various sectors. In the office sector, leasing volume showed a slight improvement, driven by renewals, relocations, and consolidations. However, vacancy rates increased in most markets except for Seoul, while rents remained stable. The retail sector continued its recovery, with retailers cautiously optimistic, leading to an increase in leasing activity. Site inspections by retailers reached their highest level in June, resulting in a gradual rise in occupancy and a 0.2% quarterly increase in rents in core retail districts. On the other hand, the logistics sector faced challenges due to a decline in regional export demand, slowing manufacturing activity, and weak e-commerce growth, leading to decreased leasing demand. Despite elevated new supply, rents in the logistics sector increased by 1.1% quarter-on-quarter, reflecting weaker growth. In the investment market, the Asia Pacific region saw a 37% contraction year-on-year to US$19.2 billion. Investors hesitated to invest due to negative carry. Challenges in the investment market included interest rates that had not yet reached their peak and property yield expansion that did not adequately reflect the rising cost of finance.