Although GDP growth in major export-oriented economies was better than expected, the potential Fed tapering in the U.S. has led to greater volatility of global capital flows, and that poses additional challenges for near term growth in Asia Pacific. Consensus Economics’ mean forecast for economic growth in the Asia Pacific region is now slightly lower for 2013 and 2014. In the property market, ample liquidity targeting high quality assets and strong growth prospects has led to continuous price appreciation and yield compression for many of the Asia ex Japan markets since the GFC. Yet, investors are becoming more cautious as we head into a rising interest rate environment; in the process of cherry-picking, they are also alert to a wide range of cyclical dynamics across sectors and locations, especially the risk of government policies. Our view is that the overall cap rate level may have already bottomed for a number of the markets in Asia.
Source : CBRE Global Investors