Total investment in real estate across the Asia Pacific (Apac) region reached US$83.2 billion ($112 billion) in the second half of 2024, reflecting a 6% year-on-year (y-o-y) increase, according to research conducted by Colliers. This brings the total investment for the whole of 2024 to US$155.9 billion, up by 12% y-o-y. These figures encompass the top nine markets in the region, including Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand, and Taiwan.
The resilient performance of the Apac real estate market in 2024 sets the stage for a robust 2025, says Chris Pilgrim, the managing director of global capital markets for Colliers in Asia Pacific. According to Pilgrim, the growth in investments demonstrates the strength and attractiveness of the region as an investment destination for institutional investors.
Domestic investors have played a significant role in driving growth in key markets such as South Korea, Taiwan, and New Zealand, contributing over 80% of the total real estate inflows in these markets in the second half of 2024.
The office sector was the largest contributor to Apac investment volume, accounting for US$26.5 billion (32%) in the second half of 2024. For the entire year, office investments reached US$51.4 billion, representing a 14% y-o-y increase.
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The industrial and logistics sector was the next biggest contributor, garnering US$22.6 billion in investments in the second half of 2024, or 27% of the total. This brings the total investment in the industry to US$39.4 billion for the whole of 2024, a 29% y-o-y increase.
The retail sector saw a significant resurgence in the second half of 2024, with US$15 billion in investments, fueled by notable deals in Australia and South Korea. The total retail investments for 2024 reached US$26.1 billion, a 27% y-o-y increase.
Pilgrim believes that domestic capital will continue to dominate most markets in 2025, but offshore investments are expected to increase, driven by improved investor confidence and attractive valuations. He also predicts that while investments in the office and industrial segments will remain robust, the retail, hospitality, and alternative asset classes will also see an increase in activity as investors take advantage of the sector’s recovery momentum and changing consumer trends.
Pilgrim adds that with the region’s economic growth remaining strong and policy support continuing, the Apac real estate market is poised for sustained investment activity in 2025.