JREI just published its most recent investor survey showing expected cap rates as of October 1.
There has been some upward movement but surprisingly little compared to the distress discounts expected by many new opportunistic funds coming into the market. Marunouchi Offices are 4%, Ginza Retail is 4.2%, Quality Central Tokyo Residential is in the mid 5% range.
Actual trades are still showing about the same levels as in this survey although trades have slowed significantly this year. We are beginning to see some distressed trades now but again, the level of discount is 20-30% above these levels and the discount is exactly correlated with the quality level of the asset.
We would reiterate the mantra that poor quality assets and non-income producing assets will continue to receive downward pricing pressure, but quality assets will not excepting in dire situations but there is an increasing demand for prime, institutionally investable assets.