Why APAC’s real estate investment landscape is set to flourish in 2025

Real estate is expected to receive over 30% of respondents' assets under management in the next five years.

In its 2025 Global Investor Outlook*, Colliers finds renewed investor optimism and confidence that the commercial property market has moved past an inflection point following two years of muted transactions.

On the back of subsiding inflation, lower interest rates, an improved economic outlook and expansive fundraising, Colliers anticipates a new global market environment to emerge in 2025 – more diverse, by asset class and investor base, than the one it leaves behind in 2024.

The associated Asia Pacific Report: 2025 Global Investor Outlook** reveals a local investment landscape gearing up for lower interest rate environment in many markets, following a prolonged inflationary period that kept many investors on the sidelines. Expectations of rate cuts, along with factors such as continued narrowing of pricing and valuation gaps, are expected to help drive transaction volumes in the APAC region.

“Strong economic fundamentals and a diverse range of lucrative asset classes will draw a growing number of international and local investors to Asia Pacific real estate markets in 2025,” Chris Pilgrim, Colliers’ Managing Director of Global Capital Markets, Asia Pacific, said.

“Optimism is rising in the APAC real estate market as interest rate cuts pave the way for increased transactions. With a narrowing pricing gap and growing investor interest in sectors like office and logistics, 2025 promises significant opportunities for cross-border investments and renewed market activity.”

Key APAC survey findings include:

• 69% of APAC survey respondents intend to allocate more than 30% of their total global assets under management (AUM) to real estate in the next five years.
• 68% expect regional economic growth to have a positive impact.
• 67% plan to invest in the region in 2025, as industrial and office sectors continue to be APAC investors’ top choice in 2025.
• 61% plan to invest in industrial and logistics, office and multifamily/build-to-rent sectors in 2025.
• 61% of APAC respondents planning to invest in the office sector intend to invest in core or core-plus CBD office assets.
• Nearly 90% expect their ESG-compliant office assets to achieve some value premium over the next three years.

"Logistics is very much a core strategy now for investors and it's definitely become mainstream,” Mr Pilgrim said. “The biggest change we are seeing is that investors are more discerning in terms of the assets they're targeting and more sensitive to where there's rental growth, especially given the supply-demand dynamics. Investors are specifically targeting assets like data centers, last-mile logistics and cold storage, with interest centered in markets like Japan, Australia, and South Korea.

"There's also a lot of demand for alternatives as investors look to diversify the way they invest in real estate. But the biggest challenge, not just in Asia Pacific but globally, is that there's still a lack of investable grade assets in a lot of these sectors, whether it's senior living or life sciences. We don’t expect supply to ramp up in 2025. But as future strategies they have really strong potential.”

*The 2025 Global Investor Outlook is based on a series of interviews conducted with senior Colliers experts as well as a survey of around 1,000 property investors in October and November 2024, nearly 400 of whom were from APAC.

** The Asia Pacific Report: 2025 Global Investor Outlook highlights on-the-ground perspectives from senior Colliers experts in the APAC region along with the key regional market insights from the survey of the company’s international investor client base globally.