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Investment appetite in the Asia Pacific real estate market has grown notably, with overall investment volumes recording a 20% year-on-year rise over the first three quarters of 2025. The latest CBRE Asia Pacific Cap Rate Survey indicated that investor sentiment continues to improve, particularly in markets such as Japan, Korea, Singapore, and Australia. Factors driving this momentum include declining interest rates, asset repricing, and renewed optimism among cross-border investors seeking opportunities in recalibrated markets.
The appetite for real estate investment across the Asia Pacific region has strengthened, as investment volumes witnessed a 20% year-on-year rise over the first three quarters of 2025, led primarily by Korea and Japan. CBRE's recently released Asia Pacific Cap Rate Survey for the third quarter reflected a marked improvement in investment sentiment and risk appetite among investors. Advertisement
Conducted twice a year with CBRE's capital markets brokers and valuers, the survey offers insights into capital markets trends, investor sentiment, and movements in cap rates across major markets and sectors in the region.
Greg Hyland, Head of Capital Markets for Asia Pacific at CBRE, stated that investment momentum across the region continues to gain pace, supported by easing interest rates and asset repricing. He noted that investors were strategically positioning themselves to acquire assets at recalibrated valuations, with Japan, Singapore, and Australia emerging as the most preferred destinations for cross-border investors.
Ada Choi, Head of Research for Asia Pacific at CBRE, commented that asset repricing has contributed to an improved risk appetite compared to six months ago. She added that the rebound in investment volume highlights growing investor confidence, which is anticipated to remain positive through the rest of the year and into 2026.
According to the survey, 90% of respondents reported stable or higher investor risk appetite, compared with 78% six months prior. Cross-border capital was found to be particularly focused on Japan, Singapore, and Australia, while investment interest in Hong Kong SAR and Australia also strengthened.
Asset repricing and rental growth have remained key drivers of investment activity, with 67% of investors identifying favourable pricing and elevated yields as their top factors for enhancing returns in the coming six months. Meanwhile, investor concerns have shifted away from tariffs towards broader economic headwinds, with 53% reporting less concern over trade-related risks and 40% viewing slower economic growth as the main macroeconomic challenge.
Sector preferences were found to be stable, with 47% of respondents citing multifamily and build-to-rent properties-particularly in Greater China and Japan-as areas of high interest. Data centres continued to lead among alternative sectors, drawing interest from 44% of respondents for shell and core assets and 43% for fully fitted spaces.
The survey further indicated that lending conditions remain accommodative across most Asia Pacific markets, except in Hong Kong SAR, where 75% of respondents described debt financing as difficult to obtain. Lenders continue to show preference for the living, hotel, and office segments, with 50% favouring the living sector. Additionally, CBRE projected a bifurcation of cap rates, with ongoing compression in Australia's retail and logistics sectors, contrasted by upward trends across Greater China.
CBRE's latest Cap Rate Survey has highlighted growing optimism within the Asia Pacific real estate landscape, driven by lower borrowing costs, asset repricing, and resilient investor sentiment. Markets such as Japan, Singapore, and Australia have attracted increased cross-border activity, while risk appetite continues to improve across the region. Despite economic growth concerns, the overall tone remains positive, suggesting sustained investment momentum and strategic repositioning well into 2026.
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