Apac real assets show strength in 2025; NTT DC Reit anchors conviction of investors in data centres: report
This comes despite ongoing geopolitical and trade uncertainty weighing on business sentiment, says Aprea
[SINGAPORE] Real assets were ranked as one of global markets’ strongest performers in 2025, where Asia-Pacific (Apac) players shone in particular, based on an Apac Real Assets Association’s (Aprea) TrendWatch report.
This regional performance came amid an environment hampered by shifting monetary policy, inflation and energy-transition pressures, as well as geopolitical risk, noted the Thursday (Dec 18) report.
The turning point of the asset class and its rise began in 2024, said Aprea, with a shift “firmly cemented” this year.
Momentum had already been visible for several years in some sectors, such as hospitality, multi-family and logistics, noted Naoki Suzuki, president and chief executive of real estate asset manager KJR Management. It has now spread to other sectors, such as retail and office.
“Limited new-floor supply forecasts, driven by higher construction costs, and more aggressive landlord negotiations contributed to a strong surge in office market rents,” he pointed out.
The shift has been clear in Tokyo, with vacancy rates in the office market falling below 3 per cent, based on data from CenterSquare Investment Management.
Such “modest improvements” can affect equity and real estate investment trust (Reit) valuations significantly, in light of developers’ large exposure to office assets, stated the report.
Suzuki said: “Many Japan Reits have achieved cash-flow growth, which translates into higher dividends and net asset values (NAVs).”
The market, which had been trading at around a 20 per cent discount to NAV at the end of last year, has recovered to a level close to NAV, he added.
Paul Lee, managing partner at investment company Northmod, noted that core logistics assets in Greater Seoul and key Malaysian corridors outperformed expectations as well, with strong leasing momentum and “pockets of rental growth”.
Infrastructure in these two regions remains in favour among investors, particularly in terms of data centres, grid-support assets and renewables tied to the energy transition.
The report added that investor conviction in the data-centre theme was cemented by the initial public offering of NTT DC Reit on the Singapore Exchange this year – the largest Reit listing in the city-state in the past 10 years.
Rise of China Reits
Meanwhile, demand for China Reits among investors increased, supported by the country’s low interest-rate environment.
“With 77 listed Reits, the asset class is rapidly reshaping China’s real estate capital markets,” said David Chen, chairman and CEO of FOG Capital and Asset Management, and independent director of Yuexiu Reit.
He added that the rise of China Reits occurred amid long-term apartment leasing, energy-related infrastructure, and digital centres staying “resilient”.
“More asset classes will be added to the China Reits family such as hotel, office and other formats of commercial real estate, which currently are not eligible to be publicly listed in China Reits,” said Chen.
He expects 2026 to bring more opportunities in acquiring “discounted core assets”, with a future exit into the China Reit market.
On the whole, despite ongoing geopolitical and trade uncertainty weighing on business sentiment, conditions improved for real estate in Apac in 2025.
“Declining rates boosted investor confidence towards the year end, and is expected to support stronger investment activity in 2026,” noted the report.
Structural demand drivers, which have continued to strengthen, range from e-commerce and data consumption to decarbonisation.
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