APAC commercial real estate investments up 23% in 2024

Q4 volumes reached $34.9b, a 10% YoY increase.

Commercial real estate investment in Asia Pacific rose 23% year-on-year (YoY) to $131.3b in 2024, surpassing 2022 levels, according to JLL.

Fourth quarter volumes reached $34.9b, a 10% YoY increase, marking the fifth consecutive quarter of growth.

All property sectors saw full-year volume growth, with cross-border investment hitting $23.8b, up 43% YoY. Strong demand for office and logistics assets from overseas investors in markets like Australia, Japan, and Singapore fuelled this rise.

Japan led the way with $10.7b in Q4 trades, a 145% YoY increase, driven by demand for logistics and office properties. Despite rising interest rates, investors used value-add strategies to manage higher debt costs.

“The fifth consecutive quarter of annualised growth for Asia Pacific commercial real estate is a testament to the region's enduring resilience,” said Stuart Crow, CEO of Asia Pacific Capital Markets at JLL.

“Despite differences across each market, investors are finding new opportunities as valuations stabilise and borrowing conditions ease,” he added.

Office sector volumes rose 12% YoY to $48.8b. South Korea saw the highest office investment in Q4, thanks to declining senior loan rates for prime office buildings.

Meanwhile, logistics assets remained in high demand, particularly in Japan, Australia, and India, leading to yield compression.

Retail sector volumes grew 28% YoY, with private capital dominating in Australia. In South Korea, corporate investors focused on value-add opportunities.

Despite global uncertainties, Asia Pacific remains attractive for investors. “Whilst debt markets navigate restrictive rate expectations, property valuations in the region are resetting, creating compelling opportunities for strategic investors,” said Pamela Ambler, head of Investor Intelligence, Asia Pacific, JLL.

“With central banks beginning their rate reduction cycles and the region’s improving transparency, Asia Pacific offers a robust case for long-term investment and sustained growth,” she added.