The Asia Pacific (Apac) real estate market continues to defy expectations, with institutional investments totaling US$83.2 billion ($112 billion) in the second half of 2024. This marks a 6% year-on-year increase, according to research by Colliers. With full-year investments reaching US$155.9 billion, a 12% year-on-year rise, the region’s top nine markets – Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand and Taiwan – have displayed remarkable resilience amidst global uncertainties.
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According to Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific, this impressive growth in investments sets the stage for a robust 2025. He notes that domestic investors have been the key drivers of growth in markets such as South Korea, Taiwan and New Zealand, accounting for over 80% of real estate inflows in these countries in the second half of 2024.
The office sector emerged as the largest contributor to Apac investment volume, accounting for US$26.5 billion (32%) of the total in the second half of 2024. For the entire year, office investments reached US$51.4 billion, a 14% year-on-year increase. The industrial and logistics sector also displayed strong growth, with investments totaling US$22.6 billion in the second half of 2024, making up 27% of the total. This brings investments in the sector to US$39.4 billion for the whole of 2024, a 29% year-on-year increase.
The retail sector saw a significant rebound in the second half of 2024, with investments amounting to US$15 billion. This was driven by substantial deals in Australia and South Korea, bringing the total retail investments for the year to US$26.1 billion, a 27% year-on-year increase.
Pilgrim predicts that domestic capital will continue to dominate most markets in 2025, but expects to see an increase in offshore investments driven by improving investor confidence and attractive valuations. While investments in the office and industrial segments are expected to remain strong, Pilgrim also foresees growth in the retail, hospitality and alternative asset classes as investors capitalize on recovery momentum and evolving consumer trends. “With economic growth remaining robust and continued policy support, Apac’s real estate market is well-poised for sustained investment activity in 2025,” he adds.