Commercial deals drive record $64 bn realty investments in Asia-Pacific | Personal Finance

The Asia-Pacific property market has roared back to life, with commercial real estate investment volumes hitting an all-time high of $63.8 billion in Q3 2025, according to Knight Frank’s Capital Markets Insights report. That’s a 56.8 per cent increase over the same period last year and nearly double Q2 2025 levels.

Year-to-date investment volumes have already reached 80 per cent of 2024’s full-year total, and Knight Frank expects the Asia-Pacific market to surpass $195 billion in 2025, up 10 per cent year-on-year.

Commercial Assets Drive the Rally

Commercial properties—covering offices, retail, hospitality and co-working spaces—were the clear star, capturing 79 per cent of total investments, or about USD 1.4 billion. That’s a 104 per cent jump YoY, highlighting a strong rebound in confidence and transaction activity.

“Q3 2025’s record transaction volume marks a genuine market revival in Asia-Pacific,” said Christine Li, Head of Research, Asia-Pacific, Knight Frank. “Investors are shifting toward active asset management and income-growth strategies, targeting defensive sectors such as living and logistics.”

The residential segment attracted $191.7 million (11 per cent share), down 49 per cent quarter-on-quarter but up 6 per cent YoY. The industrial and warehousing sector, at $85.8 million, surged 168 per cent QoQ thanks to fresh interest in logistics assets.

Cross-Border Investment Flows Rebound

Cross-border investment into Asia-Pacific rose 72 per cent quarter on quarter and 29 per cent YoY to $17.8 billion, led by Australia, which attracted $5 billion, mainly into living and industrial assets.

Japan followed with $3.5 billion, focused on office and multifamily assets, while South Korea drew $2.3 billion, largely in industrial and office properties.

“Constrained future supply of institutional-grade assets and stabilising prices are encouraging cross-border participation,” said Dan Dixon, Head of Capital Markets, Asia-Pacific, Knight Frank. “Deal flow is broad-based across offices, industrial, and living sectors—showing structural, not opportunistic, demand.”

South Korea and China Mainland Lead Regional Growth

South Korea emerged as the region’s top-performing market with $14.3 billion in transactions—up 93.6 per cent YoY—and dominated by office deals, which comprised 70.9 per cent of its total.

Major transactions included the Pangyo Tech One Tower sale for $1.42 billion, the highest-ever office transaction in South Korean history. Global investors such as BentallGreenOak and Aberdeen were among key buyers in Seoul’s CBD.

The Chinese mainland followed closely with USD 13.5 billion (+29.9 per cent YoY), fuelled by data-centre transactions that made up nearly one-third of total volume—most notably Bain Capital’s $3.9 billion divestment of WinTriX DC Group’s Chinese operations to Guangdong Hec Technology.

Australia, with $9.5 billion (+87.8 per cent YoY), benefitted from pricing stabilisation and renewed investor appetite in cities beyond Sydney, while Singapore recorded USD 3.8 billion (+28.6 per cent YoY) on the back of large transactions such as Lendlease REIT’s $356 million sale of Jem’s office component to Keppel Land.

 Sectoral Trends: Offices, Hotels, and Industrial Assets Stand Out

Office assets: $23.7 billion (+64 per cent YoY) — Rental growth and limited new supply in major CBDs are pushing values higher.

Industrial: $10.7 billion (-3.7 per cent YoY) — Muted overall, but South Korea bucked the trend (+38.6 per cent).

Hotels: $6.2 billion (+67.7 per cent YoY) — Tourism rebound lifted demand.

Retail: $7.7 billion (-13.4 per cent YoY) — Investor caution persists amid global trade uncertainty.

Outlook: A Confident Q4 Ahead

Knight Frank expects investment momentum to stay firm in Q4 2025, supported by monetary policy clarity and improved liquidity. Despite lingering US-China trade tensions, stabilising cap rates and narrowing yield spreads are boosting investor conviction.