Healthy Investor Sentiment To Drive Capital Flow In Commercial Realty

While the owners, investors, and occupiers remained cautious about real estate investments in the APAC regions, with a lot longer due diligent process, sentiment towards Indian real estate remained positive, according to Colliers recent Asia Pacific Cap Rates Report | Q4 2023.

The rental rates and capital value for office segment have remained steady inspite of healthy demand for CRE in the key markets of Bengaluru that was countered by supply keeping the cap rates range bound. Mumbai office market saw lower supply with better demand pushing vacancy down, but yields did not change significantly. The return expectation in this stable yield environment remained unchanged with cap rates being range bound.

The industrial cap rates remained flat owing to stabilization of yields and asset values as sustained demand from the third party logistic (3PL) players, eCommerce, and fast-moving consumer goods (FMCG) sectors is countered by new supply in Mumbai.