Commercial real estate investment in Asia Pacific (Apac) rose by 15% y-o-y to US$31.2 billion ($40.15 billion) in 2Q2025, says JLL. (Picture: Samuel Isaac Chua/The Edge Singapore)
Commercial real estate investment in Asia Pacific (Apac) rose by 15% y-o-y to US$31.2 billion ($40.15 billion) in 2Q2025, according to research by real estate consulting firm JLL.
The growth comes in spite of cautious market sentiment and prolonged due diligence amid economic uncertainty, says JLL. Data compiled by the company highlights that Apac commercial investments totalled US$67.6 billion in 1H2025, up 17% y-o-y.
Within the region, South Korea saw the highest y-o-y growth in 2Q2025 at 72%, securing US$6 billion of investments. “This spike in growth was driven by offices, which accounted for 77% of total market volumes, reflecting sellers’ preference to divest before central business district oversupply materialises,” says JLL.
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Meanwhile, Japan retained its position as the region’s highest contributor to 2Q2025 investment volumes at US$7.6 billion, reflecting an increase of 31% y-o-y and bringing total investment volume in 1H2025 up 23% y-o-y to US$21.3 billion. According to research by JLL, domestic investors were most active within the office sector.
Japan’s residential sector also experienced growth during the quarter, hitting its highest quarterly level since 1Q2022 and contributing more than half of the region's total living sector volume. This was driven by strong interest in multifamily assets from J-REITs and international investors such as Warburg Pincus, Aberdeen, and CapitaLand, says JLL.
In 2Q2025, the company notes that investment activity during the quarter was driven largely by the office sector, which was up 24% y-o-y and accounted for US$13.3 billion in transactions. The industrial and logistics sector came in second with US$6.3 billion (up 12% y-o-y), followed by the living sector at US$3.6 billion (up 92% y-o-y).
Due to the ongoing tariff tensions, JLL observes that investors are closely monitoring market fundamentals and tenant quality across sectors. Looking ahead, sectors including industrial and logistics, energy and infrastructure, and retail are expected to be the most vulnerable to geopolitical risk in the next five years, according to a JLL survey of 75 Apac-based investors.
That said, Stuart Crow, CEO of Apac capital markets at JLL, notes that the region’s commercial real estate remains resilient despite geopolitical tensions as it continues to attract global capital.
Pamela Ambler, JLL’s head of investor intelligence for Apac, adds: “Central banks across the region continue their rate-cutting cycles, and we’re seeing a declining cost of debt in the region, creating a more favourable environment for transactions which should further stimulate investment activity.”
She also notes that investors are beginning to factor in slower-growth scenarios under the assumption of persisting tariffs, leading to longer deal timelines and the inclusion of contingency provisions.
“Markets such as South Korea and Japan continue to demonstrate resilience, and investors seeking long-term growth can find opportunities amidst the turbulence,” says Ambler.