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Commercial real estate investments in Asia Pacific rose to USD 31.2 billion in Q2 2025, up 15% year-on-year but down 19% from Q1, impacted by global trade tariff concerns. Retail led the asset classes with a 58% quarterly surge, while China and Japan recorded the highest investment volumes. CBRE reports growing investor confidence driven by declining debt costs and a return of positive carry. Prime office and retail spaces continue to draw strong demand. India remained active with domestic and foreign capital, and hotel investments across the region surged. Despite some caution in logistics, core property markets remain well-positioned for sustained momentum.
Commercial real estate investment volumes across Asia Pacific reached USD 31.2 billion in Q2 2025, marking a 15% increase compared to the same period last year. However, investment activity dropped 19% compared to the previous quarter, impacted by uncertainty stemming from global trade tariff concerns, as per CBRE's latest regional insights. Advertisement
Retail emerged as the strongest performing asset class, registering a 58% rise quarter-on-quarter. Mainland China accounted for the highest investment volumes during this period, followed by Japan, underscoring a renewed focus on key regional economies.
Greg Hyland, CBRE's Head of Capital Markets for Asia Pacific, stated that investment activity in the region was steadily building as debt costs continued to decline, with most markets witnessing a return of positive carry. He noted that this trend would likely sustain healthy transaction levels into the second half of the year.
Despite a cautious outlook from occupiers amid macroeconomic challenges, Ada Choi, CBRE's Head of Research for Asia Pacific, pointed out that demand remained strong for prime retail and central business district office spaces. She highlighted that leasing activity reflected a clear preference for well-located, high-quality assets, with expectations of growing investment volumes as interest rates continue their downward trajectory.
In India, investment activity remained upbeat, driven by a combination of developers, international private equity, and domestic capital. In Hong Kong SAR, local investors and end-users continued to dominate acquisitions. Taiwan saw industrial assets account for nearly 90% of all investment activity, reinforcing the sector's growing prominence.
Office demand across the region held firm despite external geopolitical pressures. CBRE observed "flight-to-quality" leasing in Australian central business districts and noted sustained demand in the Middle East where office availability remains constrained.
Retail leasing showed varied trends: Vietnam benefited from new entrants from mainland China, while Singapore saw cautious expansions by retailers amid forecasts of slower consumption. India rebounded after a slow start to the year, aided by solid domestic spending. In several core markets, limited availability in prime retail zones is pushing demand into non-CBD locations.
The industrial and logistics sector saw a more cautious tone from occupiers due to recent trade-related disruptions. Yet markets like Singapore, Japan, and Australia showed resilience, supported by steady demand amidst gradually normalising supply.
Hotel investments remained a bright spot, with investors continuing to seek acquisition opportunities fuelled by strong visitor arrivals and favourable operating metrics. While tight availability persists in select markets, CBRE anticipates that momentum in this segment will remain healthy through the second half of the year.
As declining debt costs and narrowing rate expectations reshape the funding landscape, the region's core property markets appear well-positioned to attract continued investor attention in the months ahead.
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