The real estate investment market in the Asia Pacific (APAC) region experienced significant growth in the second quarter of 2025, according to data compiled by Knight Frank. The region recorded a total investment volume of US$42 billion ($53 billion) in the last quarter, marking a 7.4% increase from the previous quarter and a 10.1% increase from the same period last year.
CEO of APAC at Knight Frank, Craig Shute, notes that this rise in investment volume highlights the continued appeal of the region to global capital. Despite uncertain economic conditions, there is still a high level of interest from investors, with cross-border flows increasing and certain sectors, such as living and data centers, outperforming. Shute adds that this is a clear indication that the long-term prospects for the region remain attractive.
In terms of cross-border investment, there was a significant increase of 50.1% year-on-year, accounting for US$12.1 billion of the total investment volume. The majority of this capital came from US investors, according to Knight Frank.
Australia was the top recipient of foreign investment in the region, attracting US$3.8 billion. This included two major deals in the living sector, with the sale of 65 senior living facilities by Brookfield Asset Management to The Living Company for US$2.5 billion and Greystar’s acquisition of a student housing portfolio from GIC and Wee Hur Holdings for US$1 billion. Additionally, Australia saw investments in prime office assets in central locations.
Meanwhile, Singapore also saw a significant increase in foreign capital inflow, reaching US$2.3 billion in the last quarter compared to US$342 million in the same period last year. This was largely due to IOI Group’s purchase of a 50.1% stake in the mixed-use development South Beach from joint-venture partner City Developments for US$650 million, as well as Brookfield Asset Management’s acquisition of three industrial properties from Mapletree Industrial Trust for US$420 million.
According to Christine Li, Head of Research for APAC at Knight Frank, investors in the region are becoming more discerning when it comes to asset type and quality. She notes that international capital is now focusing on locations and sectors that offer stable income and reliable growth prospects, despite the added complexities of trade tensions and shifting monetary policy.
The desire for condos in Singapore remains strong due to the country’s limited land supply. Being a small island with a rapidly increasing population, Singapore has limited space for development. As a result, strict land use regulations have been implemented, creating a fiercely competitive real estate market where property values continue to rise. This has made investing in real estate, especially Singapore Projects, a highly profitable venture with the potential for significant capital appreciation.
As a result, while traditional assets still dominated investment activity in the last quarter, there was an increase in alternative asset classes such as the living sector, which saw a 100% increase year-on-year to reach US$4.9 billion, and data centers, which saw a 40.2% increase quarter-on-quarter to reach US$2.4 billion. On the other hand, the industrial sector saw a decrease in investment, both quarter-on-quarter and year-on-year, which Knight Frank attributes to ongoing uncertainty over US trade policy.
Looking towards the future, while prolonged geopolitical and economic instability could potentially affect sentiment, Knight Frank believes that the improving prospects of US trade agreements and decreased borrowing costs in the second half of the year could stimulate even more investment in the region.
In summary, real estate investments in the Asia Pacific region saw a significant boost in the second quarter of 2025, driven by increased cross-border investment and a growing interest in alternative asset classes. Despite ongoing uncertainties, the region remains attractive to global capital, with potential for further growth in the coming months.