APAC back in favour as global real estate capital shifts east

Property investors in the region are expanding focus from core sectors to alternatives.

Asia Pacific is seeing a sharp rebound in global real estate investment interest, with capital allocations accelerating as investors seek exposure to the region’s stronger growth outlook, according to a recent report from Colliers.

After several years of heavy weighting toward the United States and Europe, investors are increasingly turning to Asia Pacific, where they remain relatively under-allocated despite favourable fundamentals. Data from PERE shows APAC-focused capital raising surged more than 130% in the first three quarters of 2025 compared with the same period a year earlier, lifting the region’s share of global fundraising to 11% from 6%.

Colliers said the rise in fundraising points to increased capital deployment across the region, supported by continued demand for core sectors such as office and industrial and logistics. Retail and hospitality are also seeing a pickup in activity, while investor focus is broadening to alternative asset classes, led by data centres. Healthcare, affordable housing and senior living are likewise attracting growing interest.

While established markets including Japan, Australia and Singapore remain key targets, emerging markets are moving higher up the agenda. Colliers noted that India, in particular, is drawing attention from investors seeking higher returns, underpinned by long-term economic and demographic growth prospects.

Private capital and alternative deal structures gain momentum

Private capital is playing a larger role in APAC real estate markets, with family offices and high net worth individuals becoming more active, especially in Hong Kong and Australia. Colliers noted that these investors are often taking a counter-cyclical approach, pursuing assets with compelling pricing that may see limited participation from larger institutional players.

Innovative deal structures are also gaining traction. Investors are increasingly using corporate sale-and-leasebacks or private credit strategies to gain exposure in more tax-efficient ways. In line with global trends, limited partners and private equity funds are also acquiring stakes in operating companies or platforms alongside real estate assets, particularly in the living and hospitality sectors.

Office sector shows signs of recovery

The office sector, which experienced a period of stagnation, is emerging as a major beneficiary of renewed capital flows into APAC. Colliers said investor sentiment has improved as values appear to have bottomed out, supported by resilient demand in markets such as Seoul, Tokyo and Sydney.

Cross-border capital, particularly from the U.S. and Japan, is flowing into Australia, while Japan continues to attract investors due to low vacancy rates and positive rental growth. High construction costs across the region are pushing investors toward existing, income-producing buildings, though developers are increasingly looking to reposition lower-grade assets in fringe locations.

Opportunistic capital is also becoming more active, said the report. Interest in secondary CBD office assets rose by 18 percentage points year-on-year, reflecting improved pricing and limited new supply. With development pipelines slowing, well-located core assets are drawing attention as investors seek to meet tenant demand.

Data centres emerge as a standout growth sector

Data centres are one of the fastest-growing real estate segments across APAC noted Colliers in their report, with significant capital earmarked for deployment in Singapore and Australia. India is also on investors’ radar, supported by its large and expanding technology sector, although near-term growth is constrained by supply-side challenges. In Japan, limited access to power remains a potential bottleneck.

Colliers’ survey found strong cross-border interest in data centre investments looking ahead to 2026, with 11% of respondents planning to allocate capital to the sector, narrowly trailing the U.S. at 14%.

Overall, Colliers said the combination of improving valuations, resilient occupier demand and expanding sector opportunities is positioning APAC as a key destination for global real estate capital in the coming cycle.