Bangkok’s retail sector offers some of the best investment yields in Southeast Asia, according to new research from JLL.
Highlighting benchmark yields in its Asia-Pacific Retail Investment Outlook and Review, the real estate firm noted that benchmark yields for retail property in central Bangkok stood at 7 percent last year. In suburban Bangkok yields also stood at 7 percent while in secondary locations yields rose to as much as 12 percent.
Bangkok ranked alongside Jakarta as the Southeast Asian city offering the best benchmark yields in the retail sector, according to JLL, and well ahead of Ho Chi Minh, Kuala Lumpur and Singapore.
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JLL’s opinion of benchmark retail yields looks at where the best assets in each sub category would trade if offered to the market, as well as the yield movement in 2013 compared to year-end 2012. Yields are based on the assumption of assets being fully let at a current market rent, for a market acceptable lease term. It also reflects that an asset is of a desirable lot size to investors.
While it is headlines as a benchmark yield table, each asset based on its individual characteristics is unique and, as such, it is appropriate that assets are valued independently at either a discount or a premium to these indicative yields.
The research report also highlighted the likely imbalance of demand and supply for the rest of the year as the increasing the weight of capital targeting the region, driven by new capital raises and changing regulations, is met with a limited availability of investible stock.
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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