CBRE has revised its full-year investment forecast in Asia Pacific, anticipating a 10% to 15% y-o-y growth in 2025, up from the group’s initial forecast of 5% to 10% y-o-y growth in January.

According to CBRE’s 2025 Asia Pacific real estate market outlook mid-year review, this comes on the back of the region’s strong performance in 1H2025, which saw investment volumes increasing by 18% y-o-y amid ongoing global economic challenges.

Greg Hyland, head of capital markets in Asia Pacific at CBRE, says: “Momentum in investment activity is gaining traction in Asia Pacific and is expected to remain strong in the second half of the year.” He notes that Korea, Japan and Singapore saw especially strong investment momentum, while markets in Australia and Hong Kong experienced slower growth in 1H2025.

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Stable office leasing demand 

According to research by CBRE, an upcoming supply of office space totalling around 65 million sq ft is expected to enter the region this year, which is set to be concentrated within developing markets such as Mainland China, India and parts of Southeast Asia.

Despite slower office leasing activity in 2Q2025, CBRE notes that an upside revision to leasing demand is likely amid stabilising occupier confidence and tighter return-to-office mandates.

That said, the group adds that performance across the region could be mixed. Tokyo, one of the current rental leaders within the region, is expected to experience the largest upward rental revision with a projected full-year growth of over 10%, driven by strong demand and limited supply.

On the other hand, Greater China markets are anticipated to remain regional laggards, as they continue to experience rental declines in their office sector due to continued supply pressures.

Ada Choi, head of research for Asia Pacific at CBRE, notes: “Occupiers’ preference for high-quality, well-located space will widen the gap between premium and secondary office markets, especially as new supply is concentrated in emerging and decentralised locations.”

Selective growth within hospitality 

As of May 2025, year-to-date arrivals across Asia Pacific (excluding Mainland China) were up 7% y-o-y, according to research by CBRE. This comes despite current geopolitical and economic uncertainty,  with the bulk of the growth concentrated in Japan, Vietnam and Korea.

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In 1H2025, Japan saw the strongest performance with average daily rates (ADR) increasing 16.9% y-o-y due to continued tourism inflows stemming from the relatively weak Japanese Yen.

Meanwhile, ADRs in Singapore saw a slight y-o-y drop due to strong levels of supply in 2H2024, while occupancy saw modest growth as hoteliers adopt diverse pricing strategies.

Logistics and retail demand to hold steady 

Tenant sentiment in the logistics sector has softened, with occupiers looking to right-size portfolios and restructure supply chains, according to CBRE’s 2025 Asia Pacific Logistics Occupier Survey.

However, CBRE expects leasing volume within the sector to remain steady, supported by flexible landlords, ongoing demand from domestic consumption-related firms, and mid-to-long-term occupier expansion plans.

Retailers within the region remained cautious towards real estate planning in 1H2024, due to subdued consumer sentiment and weaker discretionary spending.

Despite ongoing demand for prime core locations, which are expected to keep vacancy rates low, CBRE anticipates rental growth within the retail sector to remain muted through year-end.

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