By Wyatt Avery on August 15th, 2019
Commercial property prices declined across formerly high-flying markets this quarter, as shown in the latest RCA CPPI Global Cities report. Quarterly returns fell in ten of the 18 metros that constitute the global composite index. While some of these markets may rebound next quarter, the increase in the number of declining markets, seen in the graph below, is a warning sign.
The Asia Pacific region accounted for five of those declining metros, as only Tokyo saw an increase in prices this quarter. Hong Kong and Melbourne slipped the most, down 1.3% and 2.2% QOQ. It should be noted, the quarterly price declines in Hong Kong were underway before any recent difficulties.
Price growth in Europe also stumbled this quarter, falling 0.4% from Q1’19. The RCA Global Cities composite gained 0.3%, being propped up by the North American metros, which grew 1.4% QOQ. San Francisco leads this region with commercial property prices up 14.6% YOY in Q2’19. Even though San Francisco is expensive, investors are still finding tech sector driven opportunities.
If you are a current Real Capital Analytics subscriber log into the RCA website to download the latest edition of RCA CPPI Global Cities. To learn more information about the advantages of being an RCA client, contact us.
Also on RCA Insights: