Asia Pacific’s real estate market showed resilience in the second half of 2024 with institutional investments totaling US$83.2 billion ($112 billion), representing a 6% year-on-year increase, according to research by Colliers. This brings the full-year investments in the region’s top nine markets – Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand, and Taiwan – to US$155.9 billion, up 12% year-on-year.
Chris Pilgrim, Colliers’ managing director of global capital markets for Asia Pacific, believes that this rise in investments demonstrates the market’s resilience and sets the stage for a strong year in 2025. He notes that domestic investors have been the driving force behind the growth in key markets such as South Korea, Taiwan, and New Zealand, accounting for more than 80% of real estate inflows in these markets in the second half of 2024.
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The office sector was the largest contributor to investment volume in Asia Pacific, accounting for US$26.5 billion (32%) of the total in the second half of 2024. For the whole of 2024, office investments reached US$51.4 billion, a 14% year-on-year increase.
Meanwhile, the industrial and logistics sector as the second biggest contributor, with investments totaling US$22.6 billion in the second half of 2024, representing 27% of the total. This brings the full-year investments in this sector to US$39.4 billion, a 29% year-on-year increase.
The retail sector also rebounded significantly, with investments reaching US$15 billion in the second half of 2024, driven by major deals in Australia and South Korea. For the entire year, retail investments amounted to US$26.1 billion, a 27% year-on-year increase.
Pilgrim expects domestic capital to continue dominating most markets in 2025, while offshore investments are expected to increase as investor confidence improves and valuations become more attractive. He predicts that while office and industrial segments will continue to see robust investments, sectors such as retail, hospitality, and alternative assets will also gain traction as investors capitalize on the market’s recovery and evolving consumer trends. “With economic growth and policy support remaining strong, we can expect sustained investment activity in Asia Pacific’s real estate market in 2025,” Pilgrim adds.