According to recent research by Colliers, institutional investments in real estate in the Asia Pacific (Apac) region totalled US$83.2 billion ($112 billion) in the second half of 2024, an increase of 6% from the previous year. This brings the total investments for the full year to US$155.9 billion, up 12% from 2023. The figures cover the top nine markets in the region: Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand, and Taiwan.
The steady rise in investments demonstrates the resilience of the Apac real estate market and sets the stage for a strong 2025, according to Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific. He notes that local investors have been the main driving force behind the growth in key markets such as South Korea, Taiwan, and New Zealand, accounting for over 80% of real estate inflows in these countries in the second half of 2024.
The office sector was the largest contributor to investment volume in Apac, accounting for US$26.5 billion (32%) of the total in the second half of 2024. For the full year, office investments reached US$51.4 billion, up 14% from the previous year. The industrial and logistics sector was the second biggest contributor, with US$22.6 billion in investments in the second half of 2024, accounting for 27% of the total. The sector saw a robust growth of 29% year-on-year, with total investments reaching US$39.4 billion in 2024.
In a significant rebound, the retail sector recorded investments of US$15 billion in the second half of 2024, driven by large deals in Australia and South Korea. Total retail investments for the year stood at US$26.1 billion, a 27% increase from the previous year.
Pilgrim predicts that domestic investors will continue to dominate most markets in 2025. However, he expects offshore investments to increase as investor confidence improves and attractive valuations become available. While the office and industrial segments are expected to maintain their strength, Pilgrim also sees potential growth in the retail, hospitality, and alternative asset classes as investors capitalize on the recovering market and changing consumer trends.
He concludes that with a strong economic outlook and continued policy support, the Apac real estate market is poised for sustained investment activity in 2025.