Three Southeast Asian cities have topped the list of world office yields for Grade ‘A’ offices in new research that has been more than a year in the making.
Topping the list, with yields of more than 9 percent, is Vietnam’s Ho Chi Minh City. Closely following in second place is Hanoi while Manila is ranked third of the global cities included in the survey from real estate firm Savills and Deakin University.
Cities in Asia and Australia dominate the top ten best-performing cities, with only Dallas and Tampa Bay making it into ninth and tenth spot respectively.
In its World Office Yield Spectrum 2H/2015 research report, the companies noted that with investment capital becoming more global in its search for returns and diversification, the need for a standardised set of indicators to make sense of opportunities, risk and return expectations has become critical.
“For too long the global property investment community has been denied a credible, factual yields series which can be reliably used to compare ‘apples with apples.’ This world first publication is the culmination of over a year’s work by dozens of researchers in the Savills team.”
The report defines market yields by capitalising current market rents (net face) against current capital values for office buildings. The Net Face rent is the rent payable by the tenant excluding both statutory and operating outgoings (recoverables), and includes the value of any incentive paid to the tenant by way of fit-out, cash, rental rebate or rent free periods.
The capital value is calculated to be for the office component only and excludes retail, excess car parking, signage, storage and other “non-office” sources of income.
To read the full Savills/Deakin University World Office Yield Spectrum report click here.
