Apac commercial real estate momentum still intact, Singapore among standout markets: MSCI
Singapore recorded US$7.9 billion in deal volume in 1Q2026, up 439% y-o-y (Picture: Samuel Isaac Chua/EdgeProp Singapore)
The recovery in the Asia Pacific (Apac) commercial real estate market that began in the middle of last year has continued gaining momentum this year, says US-based data and analytics firm MSCI. Data in its latest Asia Pacific Capital Trends report show that real estate transaction volume rose 22% y-o-y in 1Q2026 to hit US$51.1 billion ($65 billion).
The region also saw the sales of individual assets climb 17% y-o-y across the same period, while cross-border investment surged 64% y-o-y to US$18.2 billion.
“Apac’s commercial real estate markets have entered 2026 on a strong footing, with Singapore the clearest illustration of how falling interest rates has contributed to improved market liquidity,” remarks Benjamin Chow, head of private assets research for Asia at MSCI.
The Republic registered a 439% y-o-y jump in volume to US$7.9 billion in 1Q2026, unseating Tokyo as Apac’s most active metro for the first time since 2021. MSCI adds that Singapore’s deal volume ranked top for the office, retail and industrial sectors, with the first two segments bolstered by transactions involving the establishment of Hongkong Land’s Singapore Central Private Real Estate Fund.
Transaction volume in 1Q12026 across top countries
Source: MSCI
MSCI points out that other assets in Singapore that have been on the market for some time, such as 78 Shenton Way and i12 Katong, also found buyers. In addition, the lower cost of financing helped to push through certain deals, including the sale of Thomson Plaza, which was priced at a tight 3.7% cap rate, 180 basis points lower than at its acquisition three years ago.
Elsewhere in the region, China logged US$13.4 billion in deal volume in the last quarter, up 55% y-o-y, largely propelled by Bain Capital’s US$4 billion disposal of China data centre business, Chindata. South Korea posted a 30% y-o-y increase in volume to US$5.6 billion, backed by large office deals, while Hong Kong registered a 367% surge y-o-y in volume to US$1.8 billion.
In contrast, Japan charted a 32% y-o-y decline in volume to US$12.2 billion in 1Q2026, though this represents a moderation from peak activity last year, rather than a fall in an investment appetite, says MSCI.
In terms of property types, the office segment led deal activity in 1Q2026 with US$21 billion in transactions, up 25% y-o-y, as institutional investors snapped up assets, particularly in Singapore, Tokyo and Seoul.
Transaction volume by property type
Source: MSCI
The industrial and retail segments also recorded growth, with deal volume totalling US$10.3 billion (up 33% y-o-y) and US$9.7 billion (up 31% y-o-y) respectively. Additionally, data centre acquisition volumes more than doubled y-o-y, reaching US$4 billion in 1Q2026.
Looking ahead, while the outbreak of the war in the Middle East has introduced fresh uncertainty around inflation and long-term interest rates, which has resulted in a pullback in deals, MSCI believes the underlying structural drivers fuelling Apac’s capital markets recovery are still intact.
“The ongoing improvement in capital values, the shrinking pipeline of new development due to elevated construction costs, and global capital's continued search for diversification away from the US, are not only unaffected but perhaps even accentuated by the ongoing conflict,” the report states.
In addition, listed real estate indexes continue to sit above their end-2025 levels for most major markets, pointing to signs of a broader recovery that “has not yet been materially derailed”.
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