Asia Pacific real estate investment to rise by up to 10% in 2026

Full-year investment volumes reached US$157 billion in 2025.

The Asia Pacific commercial real estate market is set to extend its recovery into 2026, with investment and leasing activity expected to strengthen despite moderating economic growth, according to the 2026 Asia Pacific Real Estate Market Outlook released by CBRE.

CBRE forecasts a further 5–10 percent year-on-year increase in commercial real estate investment volumes across the region in 2026, following a robust rebound in 2025. Full-year investment volumes reached US$157 billion in 2025, representing a 22 percent increase from the previous year, underscoring renewed investor confidence across asset classes.

A key shift identified in CBRE’s outlook is the return of the office sector as investors’ most preferred asset class for the first time since 2020. The consultancy attributes this to improving leasing fundamentals and structurally constrained supply in core city locations, alongside growing occupier demand for high-quality buildings. With yield compression expected to remain limited, investors are increasingly focusing on rental growth and income resilience as primary drivers of returns.

“As we move into a cycle where income growth is at the centre of real estate decision-making, the ability for occupiers and investors to recalibrate and innovate will be critical,” said Ada Choi, Head of Research, Asia Pacific at CBRE. She noted that occupiers are sharpening their space requirements and prioritising premium buildings in core locations, while investors concentrate on portfolio optimisation and stable income streams. Choi also highlighted emerging opportunities in sectors such as data centres and living.

Net buying intentions across Asia Pacific are projected to strengthen to 17 percent in 2026, up from 13 percent in 2025 and just 5 percent in 2024, reflecting improving sentiment. In terms of cross-border capital flows, Tokyo remains the leading destination, followed by Sydney, with Singapore and Seoul tied, and Hong Kong SAR returning to the top five preferred markets for global investors, according to CBRE.

Leasing activity is also expected to gain momentum in 2026. CBRE anticipates stronger occupier demand for Grade A office space, supported by stricter return-to-office mandates and a continued flight-to-quality trend. Expansionary demand is likely to be driven by technology firms—particularly software companies benefiting from AI adoption—as well as wealth management and professional services firms.

Regional Grade A office supply is forecast to peak at 61.3 million sq. ft. in 2026, with more than three-quarters concentrated in India and mainland China. In developed markets, however, new supply is expected to remain constrained due to high construction costs, supporting rental growth in cities such as Tokyo, Singapore and major Australian CBDs.

In the logistics sector, rents are projected to continue rising across most markets, although growth is expected to moderate as occupiers adopt more selective expansion strategies. Third-party logistics providers and e-commerce operators remain the primary demand drivers, with strong preference for large-scale, automation-ready facilities. CBRE also noted that new logistics completions are likely to decline sharply from 2027 onwards as elevated land and construction costs curb development pipelines.

Retail leasing activity is forecast to exceed 2025 levels, buoyed by improving retail sales and clearer trade policy direction. Tight vacancy in prime retail locations and limited new supply are expected to intensify competition for space. The sector continues to pivot toward experiential formats, with landlords placing greater emphasis on dining, wellness, services and other experience-led offerings as part of tenant remixing strategies.

In the hospitality segment, tourism arrivals across Asia Pacific are nearing pre-pandemic levels. While growth in 2026 is expected to normalise compared with the sharp rebound of recent years, event-driven tourism will continue to underpin demand in major cities. However, revenue per available room growth is likely to moderate as average daily rates stabilise.

Overall, CBRE’s outlook points to a maturing recovery cycle across Asia Pacific real estate, characterised by income-driven strategies, a renewed focus on quality assets and a steady, if more measured, pace of growth heading into 2026.