Lim believes the second half of 2024 is set to mark the bottom of the rising rate, and declining capital values cycle. In a report dated July 18, M&G Real Estate notes that real estate yields across many parts of developed Asia Pacific regions are at their highest levels in a decade, providing attractive income returns.
It is currently an ideal time for investors to position their portfolios in the Asia Pacific real estate market as it is poised to benefit from healthy asset yields, secular growth trends and unique market dynamics. This comes after 2-3 years of rising interest rates that caused capital values to fall, and property yields to rise according to Regina Lim, Head of Property Research Asia, M&G Real Estate.
"During the last 15 years, gains were made during a time when rates were low, capital values rose, and capitalisation rate compression was a huge factor in overall performance," says Lim during a media briefing on July 18. "We think that it's a good opportunity to think about the normal state prior to this period [of rising yields and falling capital values]. In the last 15 years, the low interest rate environment was a special period and won’t be repeated."
