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The Asia Pacific commercial real estate market witnessed a resurgence, driven by cyclical and structural factors as well as interest rate cuts. Investment volumes rose notably, supported by strong performances in Japan, India, and Singapore. CBRE's latest Asia Pacific Investment Strategies report highlighted opportunities across offices, logistics, retail, and data centres, with core assets in well-connected locations gaining preference and emerging sectors such as living spaces and data centres seeing rising investor demand.
The Asia Pacific commercial real estate market has been witnessing several favourable cyclical and structural changes, aligned with the ongoing interest rate cut cycle. During the past quarter, the region's commercial real estate investment volume, calculated at a fixed exchange rate, increased by 16% quarter-on-quarter to reach around USD 38.1 billion. Japan, India, and Singapore recorded notable gains during this period. Advertisement
CBRE released its 2025 Asia Pacific Investment Strategies report, outlining opportunities for both buyers and sellers looking to benefit from cyclical and structural market movements. The report suggested that pricing and performance were expected to rebound over the medium term, presenting viable entry points in specific markets and sectors.
Office markets in India, Australia, and Japan were identified as promising investment avenues, with rental growth projections appearing increasingly positive. Core assets located close to public transport and amenities were becoming more sought after, while the divide between occupier preferences for centralised and decentralised locations continued to widen.
In the industrial and logistics sector, assets situated in manufacturing-driven regions such as Southeast Asia and India were forecast to outperform, supported by growing occupier demand. Meanwhile, dry logistics in Korea was expected to retain strong investor interest, with the continued expansion of e-commerce further stimulating demand for logistics spaces in rapidly adopting markets.
Retail performance remained cautious amid global trade uncertainty; however, rental growth was projected to persist through 2025 and 2026. Key growth drivers included population expansion and rate reductions in Australia, steady tourist inflows offsetting weaker domestic consumption in Japan and Korea, and strong leasing activity among Indian retailers.
The living sector showed accelerating momentum despite its limited scale in the region. CBRE advised investors to focus on established markets such as Japan, where attractive cash-on-cash yields and low vacancy rates offered stability. It also noted potential in developing build-to-rent or student accommodation projects in markets like Australia and Hong Kong SAR, where significant supply shortfalls persist.
Data centres continued to emerge as a prime investment class across the Asia Pacific region. With AI-related demand intensifying, supply in most markets was expected to lag behind. Japan, Australia, and Korea were anticipated to present ongoing opportunities as operators looked to recycle assets, while development partnerships in Southeast Asia were also set to gain traction.
The Asia Pacific commercial real estate sector is entering a phase of renewed momentum, driven by structural resilience and supportive monetary policy. While offices, logistics, and data centres are expected to lead investment activity, the living and retail segments also show encouraging growth prospects. With economic stability and technological adoption reinforcing investor confidence, CBRE's outlook suggests that both established and emerging markets across the region will remain well-positioned for sustainable performance over the coming period.
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