CRE investments rise 41% to $12.5 in Q1

JLL said easing financing conditions and education-related demand supported activity.

Commercial real estate investment volumes rose 41% YoY to $12.5b (US$1.6b) in the first quarter of 2026, supported by easing financing conditions and renewed interest in core office and retail assets, according to JLL.

Lower borrowing costs helped support deal activity, with the one-month HIBOR falling from 3.1% at end-December 2025 to 2.2% by end-March 2026.

The office sector saw improved liquidity as asset prices in core locations approached a near-term floor. Notable transactions included Dah Sing Financial Holdings’ $838m (US$107m) acquisition at Viva Place and Golden Diligent Ltd’s $250m (US$32m) purchase at Lippo Centre.

Retail investment also strengthened, led mainly by acquisitions from mainland Chinese F&B owner-occupiers. Distressed retail assets continued to transact, but price discounts moderated, with initial yields compressing from around 9.4% in Q4 2025 to about 6.4% in Q1 2026.

JLL said education-related demand is emerging as a structural driver in Hong Kong, as education institutions become more active buyers of office and retail assets.

This has also sustained investor interest in residential assets, hotels, and commercial properties with conversion potential into purpose-built student accommodation.

Across the Asia Pacific, commercial real estate investment volumes reached $368.1b (US$47.0b) in Q1 2026, up 31% YoY and marking the region’s strongest first-quarter performance on record. Cross-border capital flows reached a quarterly high of $127.7b (US$16.3b), up 87% YoY.

Singapore posted the strongest YoY growth in the region, with investment volumes rising 433% to $90.1b (US$11.5b), driven largely by Hongkong Land and Qatar Investment Authority’s $50.1b (US$6.4b) asset transfers to SCPREF.

JLL said Hong Kong’s recovery is expected to remain selective, with activity concentrated on prime assets amid weak broader occupier demand. However, it said Hong Kong is well-positioned to benefit if Middle Eastern institutional investors increase capital allocation to Asia.

($1 = US$0.13)