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Commercial real estate investment across Asia Pacific recorded an 18% year-on-year increase to USD 46.2 billion in the first quarter of 2026, according to CBRE’s latest regional survey. The growth was led by strong capital deployment in markets such as Singapore, India and Hong Kong SAR, despite ongoing geopolitical and macroeconomic uncertainties. While investor sentiment has moderated compared to the previous six months, it remains above pandemic-era levels, supported by steady occupier demand. Cap rate trends varied across markets, reflecting local conditions, with upward pressure in Australia and stabilisation in mainland China. Institutional investors showed increased activity in select regions, while supply constraints linked to high construction costs are expected to influence medium-term investment opportunities across the region.
Commercial real estate investment across the Asia Pacific region increased by 18% year-on-year to USD 46.2 billion in the first quarter of 2026, supported by sustained capital deployment and stable occupier fundamentals across key markets, according to a survey released by CBRE Group earlier in the past week. Advertisement
The report highlighted that investment activity remained concentrated in major markets including Singapore, India and Hong Kong SAR, where capital flows continued despite a more complex geopolitical and macroeconomic environment. The findings indicate that investors are maintaining exposure to real estate assets in the region, with a focus on markets demonstrating resilience in leasing demand and income stability.
According to the survey, investor sentiment has softened compared to six months earlier but continues to remain above levels recorded during the pandemic period. The moderation reflects ongoing concerns around global economic conditions, though underlying occupier demand across asset classes has supported investment activity.
The study also analysed capitalisation rates, a key metric used to assess property valuations based on income returns. Cap rate movements across Asia Pacific markets showed divergence, reflecting localised economic and market conditions. Australia has seen upward pressure on cap rates, while Japan has limited scope for further compression. In mainland China, cap rates are showing signs of stabilisation, indicating a gradual adjustment in pricing trends.
Hong Kong SAR recorded one of the strongest indications of buying interest among surveyed markets, suggesting renewed investor engagement across a range of capital sources. At the same time, institutional investors in mainland China have increased their activity levels, supported by participation from domestic insurance companies pursuing direct acquisitions in the real estate sector.
Geopolitical tensions were identified as a key factor affecting sentiment, particularly in markets such as South Korea and parts of the Pacific region. In addition, uncertainty around interest rate movements continues to influence investor decision-making, especially in Japan and Australia, where borrowing costs remain a consideration in asset pricing and investment strategies.
Despite these challenges, the report noted that core asset classes such as Grade A office space continue to attract investor interest across the region. In mainland China, student housing has also emerged as a segment drawing increased attention, supported by favourable supply-demand conditions.
CBRE indicated that capital deployment is becoming more selective, with investors focusing on assets offering stable income profiles or long-term growth potential. The firm’s regional capital markets head conveyed that investors are prioritising sectors and locations that provide defensive characteristics amid evolving risk conditions.
Looking ahead, the report highlighted that elevated construction costs are expected to limit new development activity, which could constrain future supply. This dynamic may lead to tighter supply-demand conditions in certain markets, potentially supporting asset values and creating opportunities for investors over the medium term.
Overall, the Asia Pacific commercial real estate market continues to demonstrate resilience, with investment activity sustained by a combination of capital availability, occupier demand and selective investor strategies across the region.
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