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Cap Rate Analysis Post AREIT Reporting Season

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Cap Rate Analysis Post AREIT Reporting Season

Following the completion of the AREIT reporting season, the audited data reflected only a very marginal firming in book value cap rates over the six months to December 2012, which contrasts with the relatively stronger firming that occurred in 2010 and the first half of 2011. The weighted average book value cap rate (WACR) of the major AREITs Australian commercial assets (office, industrial and retail) firmed by only 2 basis points (bps) over the past six months to sit at 7.68%. This reflects a 23 basis point firming over the past 3 years, however still remains 108 bps higher than the market peak in December 2007 (See Table 1).

Source : Knight Frank

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