Institutional investments in real estate across the Asia Pacific (Apac) region reached a total of US$83.2 billion ($112 billion) in the second half of 2024, a 6% increase compared to the previous year, according to research by Colliers. This brings the full-year investments to US$155.9 billion, a 12% climb compared to 2023. The data covers the top nine markets in the region, including Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand and Taiwan.
This increase in investments is a testament to the resilience of the Apac real estate market, setting the stage for strong growth in 2025, says Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific. He adds that domestic investors have been the driving force behind the growth in key markets such as South Korea, Taiwan and New Zealand, with local investors contributing over 80% of real estate inflows in these markets during 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 volume in the second half of 2024. For the whole of 2024, office investments reached US$51.4 billion, a 14% increase compared to the previous year. The industrial and logistics sector was the second biggest contributor, bringing in US$22.6 billion in investments in the second half of 2024, or 27% of the total. This brings the total investments in this sector to US$39.4 billion for the whole of 2024, a 29% increase compared to the previous year.
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The retail sector saw a significant rebound, registering US$15 billion in investments in the second half of 2024, driven by large deals in Australia and South Korea. Total retail investments for 2024 reached US$26.1 billion, a 27% increase compared to the previous year.
Pilgrim believes that domestic capital will continue to dominate most markets in 2025. However, offshore investments are expected to increase as investor confidence improves and valuations become more attractive. While investments in the office and industrial segments are expected to remain strong, Pilgrim also sees potential for growth in retail, hospitality and alternative asset classes as investors take advantage of recovery momentum and changing consumer trends. “With economic growth and policy support remaining strong, the Apac real estate market is set for sustained investment activity in 2025,” he adds.