Apac commercial real estate investment hits US$40.3 billion in Q4, capping strongest year since 2021: JLL
The increase pushed full-year investment 12% higher year on year to US$147.6 billion
[SINGAPORE] Asia-Pacific’s commercial real estate market ended 2025 on a high note, with investments in the fourth quarter rising 15 per cent year on year to US$40.3 billion.
Based on JLL’s Asia Pacific Capital Tracker 2026 Outlook released on Wednesday (Feb 4), the late-year surge pushed the value of full-year investments to US$147.6 billion, a 12 per cent increase from 2024.
This marks the region’s strongest annual performance since 2021, capping what JLL described as “a year of steady recovery against a turbulent macroeconomic and geopolitical backdrop”.
Drivers of recovery
According to the report, most markets benefited from improving conditions, with broad economic growth and rate cutting cycles finally taking hold.
Sentiment was further bolstered by the easing of tariff concerns, which helped support a renewal in investor confidence.
Liquidity also showed signs of a major comeback, signalled by the return of real estate investment trust (Reit) debuts and initial public offerings, said JLL.
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Additionally, the market saw a rise in mergers and acquisitions, specifically through “operator acquisitions as investors seek entry into operational-heavy sectors at scale”, JLL said.
“The strong year-end performance caps a year of steady recovery,” said Stuart Crow, CEO of Apac Capital Markets at JLL. “We’re seeing continued confidence from investors... A notable trend is the growing influence of regional capital, which is increasingly active in acquisitions across Apac.”
Local growth
Q4 investment within Singapore increased 28 per cent year on year to US$4.2 billion.
Local growth was driven by activity across the living, office and retail sectors, with major deals being led by Reits, institutional investors and family offices.
Singapore was also highlighted as one of the “most active markets” in the living sector, alongside Japan, Australia and China. The sector captured a record 9 per cent share of commercial real estate investments in 2025.
Japan and South Korea lead the charge
Japan remained the region’s heavyweight. Despite Q4 deals falling 9 per cent year on year to US$9.8 billion, its full-year total was up 14 per cent at US$41.4 billion.
“Investment was driven by exits from industrial development projects, several which involve foreign sellers,” JLL said.
South Korea saw a surge of activity with a 41 per cent year-on-year jump in Q4 investment to US$7.7 billion. For the full year, the figure rose 29 per cent to US$28.1 billion.
The market was supported by fierce domestic competition for core office assets and foreign interest in logistics. Investors also scoured the market for value-add hotel opportunities, driving up prices in the hospitality sector.
Mainland China, however, continued to face challenges, posting US$3.4 billion in fourth-quarter investment, down 16 per cent from 2024, while the full-year figure fell 17 per cent.
In Hong Kong, quarterly investment rose 62 per cent on-year to US$2.4 billion, bolstered by two major office transactions.
India had a standout performance in Q4, recording commercial real estate investment of US$2.4 billion, four times more than in the corresponding period a year ago. For the full year, the country’s investment value rose 183 per cent year on year to US$7.1 billion.
Robust demand for office space and an uptick in foreign acquisitions in industrial assets supported growth, JLL said.
Cross-border flows
While global capital continues to lead cross-border acquisitions into major markets such as Japan and Korea, capital from other Apac sources is becoming more prominent in deal activity across the region, JLL said.
Singaporean capital in particular was most active in Australia, with a number of significant acquisitions being made throughout the year.
“Cross-border investment trends pointed to the increasing role of regional capital across Apac,” said JLL.
Cautious optimism for the year ahead
Looking ahead, JLL identifies technology as a significant catalyst for 2026.
The artificial intelligence (AI) boom is directly translating into real estate demand, specifically for data centres. In Apac, investment in the sector reached US$15 billion in 2025, fuelled by digitalisation initiatives and a robust development pipeline.
While the outlook for 2026 is described as “cautious optimism”, much depends on the trajectory of interest rates.
Pamela Ambler, Apac head of investor intelligence at JLL, said: “As we enter 2026, we anticipate a more stable operating environment supported by improving market fundamentals. The boom in AI spending has infused a new layer of optimism into the global economy, and its impact on real estate demand will be a key theme to watch.
“Furthermore, with expectations that debt costs may have bottomed out across many markets, investors will be keenly observing central bank policies.”
She added that decisions from the US Federal Reserve would remain “crucial in shaping the investment landscape”.
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