Asia Pacific’s commercial real estate market posted a strong start to the year, with investment volume rising 11% year-on-year to US$33 billion in the first quarter of 2025, according to CBRE’s latest Asia Pacific Cap Rate Survey.
The bi-annual report captures investor sentiment, cap rate movements, and sector-specific insights across the region’s key property markets.
“While investors have paused to take stock after the introduction of tariffs, particularly those assets directly exposed to exports, the impact has been largely confined to export-related sectors,” said Greg Hyland, Head of Capital Markets, Asia Pacific, at CBRE. “Overall, the broader Asia Pacific real estate market remains resilient. With greater clarity starting to emerge, investor interest continues to deepen in Asia Pacific real estate across multiple markets and asset classes.”
Investor sentiment, while cautious, remained steady. CBRE noted that 50% of survey respondents reported no change in their risk appetite compared to six months ago, indicating continued confidence in the region’s property fundamentals despite macroeconomic uncertainties.
“Investor sentiment remains stable, with half of our respondents reporting no change in risk appetite,” said Ada Choi, Head of Research, Asia Pacific, for CBRE. “CBRE forecasts a 5% year-over-year increase in investment volume in 2025, driven by interest in sectors with strong fundamentals and structural growth, particularly Australian retail properties, along with multifamily and data centre assets.”
The survey revealed a growing divergence in cap rates across Asia Pacific. While cap rate compression was observed in Australia’s retail sector, particularly for shopping malls, Greater China continued to experience upward pressure on yields, reflecting investor caution amid trade and economic uncertainty.
In terms of sector preferences, multifamily and build-to-rent assets saw a sharp increase in interest, especially in Japan, Greater China, and Australia. Investor appetite for data centres also surged, as they emerged as the preferred alternative asset class amid the digital infrastructure boom.
New Zealand and Australia recorded the highest net buying intentions, while Japan attracted the most cross-border investor interest. CBRE said that private and institutional investors remained the most active, with buying interest also strengthening for REITs and real estate funds.
Despite lingering concerns around trade policy and recession risks, CBRE’s findings suggest that investors remain focused on assets with stable income streams, rental uplift potential, and favorable pricing.
The report underscores a cautious yet resilient market dynamic, as capital continues to flow into sectors poised for long-term growth.
