Gurgaon, May 28: Asia Pacific real estate investment rose 19.2% year-on-year in Q1 2026, marking a firm start to the year despite heightened geopolitical tensions and ongoing global trade and energy uncertainty. Growth was supported by improved sentiment and renewed cross-border capital flows, although activity remained selective, with capital focusing on core markets and assets offering income visibility and liquidity.
Prime office investment led the recovery, rising an estimated 25.7% year-on-year, underpinned by tightening vacancies and rental growth in key gateway cities including Tokyo and Singapore. At the same time, industrial and logistics assets continued to attract capital, supported by demand linked to AI-related manufacturing, semiconductor exports, data centre development and infrastructure investment across markets including Japan, Taiwan, India and Malaysia.
“Asia Pacific entered 2026 amid elevated geopolitical risk, yet capital deployment remains active,” said Neil Brookes, Executive Managing Director and Head of Asia Pacific Capital Markets at Savills. “The recovery in prime offices, combined with durable demand for industrial and logistics assets, points to a more selective but constructive investment environment.”
“India continues to stand out as a high-conviction market within Asia Pacific, driven by strong demand for industrial and logistics assets, rapid data centre expansion and sustained infrastructure-led growth. As global capital becomes more selective, India’s long-term fundamentals and occupier demand continue to attract investor interest across core and emerging asset classes,” said Anurag Mathur, CEO, Savills India.
Cross-border capital concentrates in Japan and Singapore
Cross-border investment activity strengthened during the quarter, with Japan and Singapore accounting for a significant share of international capital flows. Investment sales were particularly strong in Singapore, achieving S$11.48 billion in Q1, up nearly 95% year-on-year.
In Japan, strong occupier demand, limited supply and positive yield spreads continued to support pricing, with prime office rents in Tokyo’s Central 5 Wards reaching new highs.
Selective re-engagement across major markets
Investment activity remained uneven across the region, with several markets showing early signs of repositioning and re-engagement.
In China, investment volumes declined year-on-year as legacy strategies continued to unwind, although pricing adjustments have begun to attract renewed interest from both domestic and international investors.
In Hong Kong, non-residential investment increased, driven by office and hotel transactions, with end users active buyers and investors targeting repositioning opportunities such as hotel-to-student accommodation conversions.
Data Centre expansion and industrial demand continue to attract capital
Industrial and logistics assets remained a key focus for investors, supported by structural drivers including technology-led expansion, semiconductor manufacturing and data centre development.
Across the region, transaction activity reflected this shift. Taiwan recorded a quarterly high in commercial property transactions driven by owner-occupied factory acquisitions by technology companies, including one of the largest industrial property deals in nearly two decades.
In Malaysia, data centre and IT infrastructure-related acquisitions accounted for more than half of industrial investment activity during the quarter, underscoring the growing role of digital infrastructure in driving capital deployment.
A selective but sustained outlook
While uncertainty linked to US tariff policy, energy supply risks and geopolitical tensions persist, investment activity in Asia Pacific continues to be defined by selectivity, with capital targeting assets aligned to long-term structural drivers and income resilience.
Savills expects investment momentum to remain firm but measured through 2026, with offices, prime logistics and AI-related sectors continuing to anchor investor interest as pricing expectations stabilise.
