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The Asia Pacific commercial real estate sector showed strong resilience in the first half of 2025, with investment volumes climbing 18% year-on-year, according to CBRE's mid-year market outlook. Backed by solid fundamentals, CBRE revised its full-year forecast to a 10-15% rise in investments, driven largely by demand in Korea, Japan, and Singapore. Office leasing is expected to remain steady, with significant rental growth in Tokyo and Mumbai, while Greater China faces continued declines. Logistics and retail are forecast to remain stable, and hospitality is witnessing strong performance in markets such as Japan, Korea, Vietnam, and India.
Asia Pacific's commercial real estate market delivered a strong performance in the first half of 2025, despite global economic headwinds and the continued impact of U.S. trade policies. CBRE's mid-year review reported an 18% year-on-year increase in investment volumes, prompting the firm to revise its forecast for full-year growth to between 10% and 15%. This momentum was attributed to heightened investor activity in Korea, Japan, and Singapore, with Australia and Hong Kong SAR also showing early signs of improvement. Advertisement
Greg Hyland, Head of Capital Markets for CBRE Asia Pacific, observed that investment activity was gathering pace and likely to stay buoyant through the remainder of the year. While office investment sentiment has improved, substantial upcoming supply in markets such as mainland China, India, and parts of Southeast Asia may influence future activity. Investors are increasingly targeting data centres and living sector assets, recognising their structural growth potential.
In the leasing market, CBRE anticipates activity to remain broadly in line with 2024, supported by steadier business sentiment and tighter return-to-office requirements. Tokyo and Mumbai recorded exceptional annual rental growth exceeding 10%, driven by high demand and constrained supply. Conversely, Greater China continued to register declines, with landlords introducing more flexible leasing and incentive measures. Ada Choi, CBRE's Head of Research for Asia Pacific, noted that occupiers' preference for prime, well-situated space is likely to widen the gap between premium and secondary markets.
The logistics sector is projected to maintain steady leasing volumes, supported by resilient domestic consumption and occupiers' mid-to-long-term expansion strategies, aided by landlords' flexible approaches. Retail is benefiting from strong demand for key locations, which is expected to reduce vacancy rates, although rental growth is set to remain moderate.
Hospitality markets across the region are also showing robust performance, with average daily rates rising and occupancy improving. Japan, Korea, Vietnam, and India are anticipated to lead hotel sector growth, supported by diverse pricing and operational strategies from hoteliers.
While supply pressures in some regions could temper momentum, demand for high-quality assets-particularly in prime office, logistics, and hospitality-remains strong. The focus on growth-oriented asset classes such as data centres and living spaces reflects evolving investor strategies, positioning the sector for sustained expansion through the remainder of the year and into 2026.
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