According to research by Colliers, institutional investments in Asia Pacific (Apac) real estate increased by 6% year-on-year to reach US$83.2 billion ($112 billion) in the second half of 2024. This brought full-year investments to US$155.9 billion, a 12% increase from the previous year. The figures cover the top nine markets in the region, including Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand, and Taiwan.
The rise in investments showcases the resilience of the Apac real estate market and sets the stage for a strong 2025, according to Chris Pilgrim, managing director of global capital markets, Asia Pacific at Colliers. He noted that domestic investors have been the main drivers of growth in key markets such as South Korea, Taiwan, and New Zealand, contributing over 80% of real estate inflows in these countries in the second half of 2024.
The office sector was the largest contributor to Apac investment volume, accounting for US$26.5 billion (32%) of the total in the second half of 2024. Office investments for the whole of 2024 reached US$51.4 billion, a 14% increase from the previous year. The industrial and logistics sector was the second biggest contributor, attracting US$22.6 billion in investments in the second half of 2024, or 27% of the total. This brought total investments in the sector for 2024 to US$39.4 billion, a 29% increase from the previous year.
The retail sector also rebounded significantly, registering US$15 billion in investments in the second half of 2024, driven by major deals in Australia and South Korea. Total retail investments for 2024 reached US$26.1 billion, a 27% increase from the previous year.
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Pilgrim expects domestic capital to continue to dominate most markets in 2025, but predicts an increase in offshore investments due to improving investor confidence and attractive valuations. While the office and industrial segments are expected to remain strong, Pilgrim believes that retail, hospitality, and alternative asset classes will gain traction as investors take advantage of the recovery and evolving consumer trends. He adds that Apac’s real estate market is poised for sustained investment activity in 2025, supported by economic growth and policy measures.