Funding crunch in Apac commercial real estate opens doors for local property players

COMMERCIAL real estate markets in the Asia-Pacific (Apac) region face a US$5.8 billion funding gap between now and 2025 – but therein lie pockets of opportunities for local property players eyeing assets in distress. 

In a report on the Apac commercial real estate debt market, CBRE estimated that the region has around US$177 billion of outstanding senior loans as at the first quarter of 2023. A funding gap of US$5.8 billion is expected to emerge through 2025, primarily due to declining capital values in today’s high interest rate environment, said the property consultancy. 

The gap is calculated as the difference between the original equity value of an investment and the credit likely to be available for refinancing when the loan matures.