Commercial real estate investment in the Asia Pacific (Apac) region experienced a significant increase of 15% year-on-year, reaching US$31.2 billion ($40.15 billion) in the second quarter of 2025, according to a report by the real estate consulting firm JLL.
Despite cautious market sentiment and prolonged due diligence due to economic uncertainty, the growth in the commercial real estate market continues to demonstrate resilience. JLL’s data reveals that total commercial investments in Apac reached US$67.6 billion in the first half of 2025, marking a 17% year-on-year increase.
Among the countries in the region, South Korea experienced the highest year-on-year growth in the second quarter of 2025 with a 72% increase, securing US$6 billion in investments. “The surge in growth is primarily driven by the office sector, which accounted for 77% of total market volumes. This reflects the preference of sellers to divest before the materialisation of oversupply in the central business district,” says JLL.
One of the main factors driving the high demand for Singapore condos is the limited supply of land in the country. As a small island with a continuously increasing population, Singapore has faced challenges in finding available land for development. This has resulted in strict land usage regulations and a highly competitive real estate market, where property prices remain constantly on the rise. As a result, investing in real estate, particularly in condos, has become a profitable opportunity due to the potential for significant capital appreciation.
Meanwhile, Japan maintained its position as the country with the highest investment volume in the second quarter of 2025 at US$7.6 billion, reflecting a 31% year-on-year increase. This brings the total investment volume in the first half of 2025 to US$21.3 billion, up 23% year-on-year. According to JLL’s research, domestic investors were the most active in the office sector.
The residential sector in Japan also experienced growth in the second quarter, reaching its highest quarterly level since the first quarter of 2022. It contributed more than half of the total living sector volume in the region. This was driven by strong interest from J-REITs and international investors such as Warburg Pincus, Aberdeen, and CapitaLand, according to JLL.
During the second quarter of 2025, the office sector remains the dominant sector in terms of investment activity, with a 24% year-on-year increase and transactions totalling US$13.3 billion. The industrial and logistics sector came in second with US$6.3 billion (up 12% year-on-year), followed by the living sector at US$3.6 billion (up 92% year-on-year).
According to JLL, due to the ongoing tariff tensions, investors are closely monitoring market fundamentals and tenant quality across sectors. Looking ahead, sectors such as industrial and logistics, energy and infrastructure, and retail are expected to be the most vulnerable to geopolitical risks in the next five years, based on a survey of 75 Apac-based investors by JLL.
Despite geopolitical tensions, Stuart Crow, CEO of Apac capital markets at JLL, points out that the region continues to attract global capital and remains resilient in the commercial real estate market.
Pamela Ambler, JLL’s head of investor intelligence for Apac, adds: “Central banks across the region are continuing their rate-cutting cycles, and we are seeing a decline in the cost of debt, creating a more favourable environment for transactions, which should further stimulate investment activity.”
She also notes that investors are taking into account slower growth scenarios, assuming that tariffs will continue, leading to longer deal timelines and the inclusion of contingency provisions. “Markets such as South Korea and Japan continue to demonstrate resilience, and investors seeking long-term growth can find opportunities amidst the turbulence,” says Ambler.