Asia Pacific Capital Tracker Spring 2025: Without Fear or Favor

Asia Pacific real estate markets demonstrated resilience in Q1 2025, with investment volumes reaching USD 36.3 billion, up 20% year-on-year (YoY). This sixth consecutive quarter of annualized growth showcases the region's adaptability amid global economic shifts. Most property sectors grew, with industrial and logistics as the exception.

Key factors influencing APAC markets:

Looking ahead, the Asia Pacific commercial real estate landscape will be influenced by a mix of economic, policy, and sector-specific factors.

These include the recently announced tariffs which may reshape logistics real estate dynamics, a renewed focus on CRE pricing amid market volatility, financing dislocations creating risk-reward propositions to international lenders and private credit investors, and increased activity in operational real estate such as data centers, self-storage and hospitality. Sustainability considerations influence property yields and vacancy rates, with factors such as NABERS ratings playing a crucial role.

Will the APAC real estate market's growth story continue in 2025, or will global economic headwinds present new challenges?

Japan led with a 20% YoY increase to USD 13.7 billion, its highest first-quarter volume in five years. The office sector dominated, driven by rising rents in Tokyo and Osaka. South Korea followed with USD 6.8 billion, up 58% YoY, due to declining debt costs and growing office rents. Australia registered USD 3.9 billion, a 30% YoY increase, supported by the RBA's rate cut.

The performance across other APAC markets reflected diverse economic conditions and investor sentiments. Singapore rose 16% YoY to USD 2.2 billion, focusing on higher-yielding assets. India surged 219% YoY to USD 1.3 billion, driven by REIT activity and warehousing sector interest. Hong Kong increased 49% YoY to USD 1.1 billion, rebounding from a low base. However, China continues facing challenges, dropping 33% YoY to USD 3.8 billion, with domestic insurers and private capital offsetting cautious foreign investment.

Download our latest Capital Tracker for an in-depth analysis to guide your investment decisions in this dynamic landscape.