| Enough spread? Lease risk in selected Asian office markets |
| City |
Stabilized yield |
Debt |
Spread (bp) |
| Tokyo |
5-5.5% |
2.25% |
275-325 |
| Seoul |
8.5-9% |
7% |
150-200 |
| Hong Kong |
6-6.25% |
4.75% |
125-150 |
| Singapore |
6-6.5% |
4.50% |
150-200 |
| Bangkok |
9-9.5% |
7.50% |
150-200 |
| Shanghai |
9-10%+ |
7.50% |
150-250+ |
| Beijing |
10.5-11.5%+ |
7.50% |
300-400+ |
| Guangzhou |
10.5-11.5%+ |
7.50% |
300-400+ |
| Source: Jones Lang LaSalle/LaSalle Investment Management |
Like many asset classes, Asia’s property markets have enjoyed strong growth over the past few years, compressing yields and spreads over cost of funds (see table). Yet there is little sign that the region’s real estate markets are preparing to pause for breath as demand from investors continues.
"We remain very positive about the prospects for the region," says David Edwards, regional director at LaSalle Investment Management in Hong Kong. "Economic growth is very strong,...
