The Asia Pacific commercial real estate market is showing signs of strength, boosted by favourable cyclical and structural shifts, alongside the ongoing interest rate cut cycle.
In the third quarter of 2025, commercial real estate investment volume in the region surged 16% quarter-to-quarter to US$38.1 billion, with Japan, India, and Singapore leading the gains.
CBRE, in its 2025 Asia Pacific Investment Strategies report, highlighted opportunities for buyers and sellers aiming to capitalise on both cyclical and structural factors, with pricing and performance expected to rebound over the medium term.
The report identified offices in India, Australia, and Japan as attractive entry points, citing improved rental growth prospects. Core assets close to amenities and public transport remain highly sought after, with a widening gap in occupier preference between centralised and decentralised locations.
Industrial and logistics assets are expected to outperform in areas with strong manufacturing occupier demand, including Southeast Asia and India. Dry logistics in Korea remains a focal point for investors, while e-commerce continues to drive demand for logistics space across rapidly adopting markets.
Retail demand has been more cautious due to global trade uncertainty, but most markets are expected to see continued rent growth in 2025 and 2026. Tailwinds include population growth and rate cuts in Australia, solid tourist arrivals in Japan and Korea, and strong leasing demand from local retailers in India.
Living sector demand continues to accelerate despite its limited scale in Asia Pacific. Established markets such as Japan offer attractive cash-on-cash yields and low vacancies, while build-to-rent and student accommodation projects present opportunities in Australia and Hong Kong SAR.
The data centre sector is also expanding rapidly, driven by strong demand for AI capabilities. Tier I markets such as Japan, Australia, and Korea are expected to see continued investment, with development partnerships emerging as viable options in Southeast Asia.
CBRE said the combination of strategic locations, evolving occupier demand, and sector-specific opportunities positions Asia Pacific commercial real estate as a compelling option for investors in the medium term.
