Asia Pacific investment volume drops 18% in Q1 2025

The region recorded US$26.4b in total real estate investment during the quarter, down 18% YoY.

Investment volumes across Asia Pacific fell in Q1 2025, but select sectors and cities are showing signs of a rebound, according to CBRE’s latest regional market figures.

The region recorded US$26.4b in total real estate investment during the quarter, down 18% YoY. However, private capital is gaining ground, accounting for 32% of deal volume—up from 24% in the same period last year—as institutional investors remain cautious.

India posted the strongest GDP growth in the region at 6.2%, followed by Vietnam at 5.9% and China at 4.8%. These markets are also driving real estate activity, particularly in the office and logistics sectors.

India saw a strong recovery in office leasing with 10 million sq. ft. absorbed in Q1, an 18% increase from Q4 2024.

Singapore’s office vacancy rate tightened to 5.6%, one of the lowest across APAC, whilst Tokyo remained stable with a 3.1% vacancy rate. By contrast, vacancy rates in Hong Kong and Sydney stayed above 10%, though they showed early signs of stabilizing.

Footfall in key shopping districts jumped 15–25% compared to the previous quarter, powered by a tourism rebound. Japan alone welcomed over 6 million inbound visitors in Q1. Luxury sales surged, especially in Seoul and Singapore, where YoY growth hit double digits.

Industrial leasing demand was led by India and Vietnam, which together absorbed 13.2 million sq. ft. of logistics space. Rents across the APAC logistics market grew 2.3% on average, with cities like Ho Chi Minh City and Greater Tokyo seeing continued momentum.

Sustainability is translating to performance. Green-certified buildings commanded 5–10% higher rents and reported stronger occupancy rates. ESG compliance is increasingly shaping investment decisions and leasing strategies.