In the second half of 2024, institutional investments in Asia Pacific (Apac) real estate saw a 6% increase year-on-year, reaching a total of US$83.2 billion ($112 billion), according to research by Colliers. This brings the full-year investments to US$155.9 billion in 2024, climbing by 12% compared to the previous year. The figures cover the top nine markets in the region: Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand and Taiwan.
This rise in investments demonstrates the resilience of the Apac real estate market and sets the stage for a robust 2025, according to Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific. Pilgrim also noted that domestic investors have continued to drive growth in key markets such as South Korea, Taiwan and New Zealand. In the second half of 2024, local investors accounted for over 80% of real estate inflows in these markets.
The office sector was the largest contributor to Apac investment volume, making up US$26.5 billion (32%) of the total volume in the second half of 2024. For the whole of 2024, office investments accounted for US$51.4 billion, marking a 14% increase year-on-year. The industrial and logistics sector was the second biggest contributor, with US$22.6 billion in investments in the second half of 2024, making up 27% of the total. This brings the total investments in the industry to US$39.4 billion for the whole of 2024, marking a 29% increase year-on-year.
The retail sector saw a significant rebound, registering US$15 billion in investments in the second half of 2024, boosted by substantial deals in Australia and South Korea. Total retail investments for 2024 came in at US$26.1 billion, reflecting a 27% increase year-on-year. Pilgrim believes that domestic capital will continue to dominate most markets in 2025, while offshore investments are expected to rise due to improving investor confidence and attractive valuations.
While investments into the office and industrial segments are predicted to remain robust, Pilgrim believes that there is also potential for growth in the retail, hospitality, and alternative asset classes. This is due to investors capitalizing on recovery momentum and evolving consumer trends. He adds that with strong economic growth and continued policy support, Apac’s real estate market is well-positioned for sustained investment activity in 2025.