Press Release
9 February 2015
Analysing global yields
World Office Yield Spectrum
Savills Vietnam Co.,Ltd
18th Floor, Fideco Tower
81-85 Ham Nghi Street
District 1, HCMC
T: +84 8 3823 9205
savills.com.vn
Hong Kong and Tokyo have the lowest office property investment yields in the world
according to ground breaking research published by leading property adviser Savills. In
Savills World Office Yield Spectrum, published in conjunction with Deakin University,
while San Francisco and Sydney offer amongst the most attractive office investment
yields in the world.
Australian co-ordinator of the publication and Savills National Head of Research Tony
Crabb said, ‘Globally, interest rates remain low and are anticipated to remain low for the
foreseeable future. Commercial property yields in particular continue to look attractive.’
In bond markets 10 year yields closed out the year around 2 percent in the United States,
1.8 percent in the UK, 0.6 percent in Germany, 0.35 percent in Japan and 2.8 percent in
Australia. When you look at the yields on offer in core office markets around the world the
spread is between 2 percent and up to 4 percent. These are very attractive returns in a
low growth, low inflation investment climate.
According to Crabb, ‘burgeoning amounts of sovereign debt coupled with impaired
budgetary positions and an ageing population demanding more from governments is likely
to keep interest rates low for years to come. As the world population ages, a great deal of
retirement saving can be expected to chase yield. This, when combined with low interest
rates, can be expected to keep downward pressure on income returns into the
foreseeable future.’
In the United States, the emerging economic recovery from the GFC, the end of
Quantitative Easing and the prospect of interest rates rising see such a wide range of
office investment yields. Core stabilised markets such as New York, San Francisco and
Los Angeles provides returns in the mid 5% range. Move further afield to Dallas,
Washington DC, Houston and San Diego and you can achieve yields in the 7% range.
Savills Vietnam
Savills Vietnam is the largest and most experienced real estate practice with offices in Hanoi and Ho Chi Minh
City. The company provides comprehensive property services such as: Residential Sales, Commercial Leasing,
Residential Leasing, Research & Consultancy, Valuation & Feasibility Study, Banking & Corporate Services,
Investment Brokerage & Advisory, Retail Consultancy & Leasing, Property & Asset Management, Tenant
Advisory & Representation, Industrial Consultancy & Leasing, Marketing & Creative services. Savills Vietnam
has won the Asia Pacific Property Awards 2014 for “Best Real Estate Agency in Vietnam”, “Best Lettings
Agency in Vietnam” and “Best Property Consultancy in Vietnam”. Moreover, in International Property
Awards scope, Savills has been awarded “Best Lettings Agency in Asia Pacific” and “Best Real Estate
Agency in Asia Pacific”. The company consists of over 1,000 experienced and professional staff nationwide.
Press Release
Europe - characterised by France, Germany and the UK - has very stabilised core market
office investment yields of between 3.5% and 4.5%. Given the extremely low interest rate
environment in Europe it is hardly surprising these are the prevailing yields.
In Asia, the core markets of Hong Kong and Tokyo look expensive whilst Singapore looks
to provide the best value. Core market value can be found in Seoul and Singapore. Ho
Chi Minh City is the highest market yield in the region with 9.71%. Manila had the second
highest with a 9% market yield. Ha Noi had the third highest yield with 8.9%. Taipei has
the lowest yield, 1.85%. Ho Chi Minh also has the highest effective yield, with 9.3%.
Hanoi again is ranked 3rd with 8.57% yield.
Market Yields
Simon Smith, Senior Director, Savills Research Asia Pacific commented, “Because AsiaPacific remains challenging in yield terms, there are early indications that capital flows are
reversing and more real estate capital is leaving the region than entering it. In 2014,
US$22.4 billion flowed into the region while US$37.4 billion left, mostly for Europe and the
U.S. Initially targeting first tier cities, this capital is now looking for opportunities in fringe
Savills Vietnam
Savills Vietnam is the largest and most experienced real estate practice with offices in Hanoi and Ho Chi Minh
City. The company provides comprehensive property services such as: Residential Sales, Commercial Leasing,
Residential Leasing, Research & Consultancy, Valuation & Feasibility Study, Banking & Corporate Services,
Investment Brokerage & Advisory, Retail Consultancy & Leasing, Property & Asset Management, Tenant
Advisory & Representation, Industrial Consultancy & Leasing, Marketing & Creative services. Savills Vietnam
has won the Asia Pacific Property Awards 2014 for “Best Real Estate Agency in Vietnam”, “Best Lettings
Agency in Vietnam” and “Best Property Consultancy in Vietnam”. Moreover, in International Property
Awards scope, Savills has been awarded “Best Lettings Agency in Asia Pacific” and “Best Real Estate
Agency in Asia Pacific”. The company consists of over 1,000 experienced and professional staff nationwide.
Press Release
Effective Yields
and second tier locations. Cap rate spreads remain healthy in some local markets and
Tokyo, Osaka, Sydney and Melbourne continue to attract significant investor demand.
Most notable has been a decline in the appeal of China where yields remain heavily
compressed, overbuild is evident in many markets and economic growth has failed to
match expectations.”
-endsFor enquiries, please contact:
Vo Ngoc Thao (Ms.)
Corporate Communications Manager (HCMC)
Savills Vietnam Co., Ltd
Dinh Huong Linh (Ms.)
Corporate Communications Manager (HN)
Savills Vietnam Co., Ltd
T:+84 8 3823 9205 Ext:153
F:+84 8 3823 4571
E:[email protected]
T:+84 8 3823 9205 Ext:112
F:+84 8 3823 4571
E:[email protected]
T:+84 4 3946 1300 Ext:112
F:+84 4 3946 1302
E:[email protected]
Savills Vietnam
Savills Vietnam is the largest and most experienced real estate practice with offices in Hanoi and Ho Chi Minh
City. The company provides comprehensive property services such as: Residential Sales, Commercial Leasing,
Residential Leasing, Research & Consultancy, Valuation & Feasibility Study, Banking & Corporate Services,
Investment Brokerage & Advisory, Retail Consultancy & Leasing, Property & Asset Management, Tenant
Advisory & Representation, Industrial Consultancy & Leasing, Marketing & Creative services. Savills Vietnam
has won the Asia Pacific Property Awards 2014 for “Best Real Estate Agency in Vietnam”, “Best Lettings
Agency in Vietnam” and “Best Property Consultancy in Vietnam”. Moreover, in International Property
Awards scope, Savills has been awarded “Best Lettings Agency in Asia Pacific” and “Best Real Estate
Agency in Asia Pacific”. The company consists of over 1,000 experienced and professional staff nationwide.
Press Release
Vu Kieu Linh (Ms.)
Marketing & PR Director
Savills Vietnam Co., Ltd