Commercial Real Estate News
Asia Pacific Commercial Property Investment Spikes 23 Percent in 2024
Japan was Asia Pacific's top commercial property investment target
New data from global real estate consultancy JLL reveals a 23% year-on-year (YoY) increase in commercial real estate investment across Asia Pacific in 2024, totaling $131.3 billion and surpassing 2022 levels. Investment volumes in Q4 alone grew 10% YoY to $34.9 billion, marking the fifth consecutive quarter of YoY growth for the region.
Sector Growth and Cross-Border Investment
All major property sectors saw full-year volume growth, with Q4 delivering the highest quarterly cross-border volumes since late 2021. Cross-border investments reached $23.8 billion in 2024, reflecting a 43% YoY increase, driven by strong interest in office and logistics assets in key markets such as Australia, Japan, and Singapore.
Japan Leads the Region
Japan emerged as one of the most active markets, recording $10.7 billion in Q4 trades--a 145% YoY increase. This surge was fueled by robust demand for logistics and office properties. Despite rising interest rates, investors adopted value-add strategies to counter higher debt costs, further boosting market activity.
"The fifth consecutive quarter of annualized growth for Asia Pacific commercial real estate demonstrates the region's resilience," said Stuart Crow, CEO, Asia Pacific Capital Markets at JLL. "As valuations stabilize and borrowing conditions improve, early movers in 2025 are likely to benefit from a less competitive landscape, particularly in office and logistics sectors."
Office and Logistics Sector Highlights
The office sector across Asia Pacific continued its rebound, with 2024 investment volumes rising 12% YoY to $48.8 billion. In Q4, South Korea led office investment, supported by declining senior loan rates for prime office buildings. Investors showed a preference for medium-sized, stabilized assets as large-scale financing remained challenging.
Logistics also remained a favored asset class, with significant portfolio transactions in Japan, Australia, and India driving yield compression. Strong rental growth made Japan logistics particularly attractive to both domestic and overseas investors. In Australia, logistics investments rebounded in key gateway markets such as Sydney and Melbourne.
Retail Sector Gains Momentum
The retail sector recorded a 28% YoY growth in volumes in 2024. Private capital dominated retail purchases in Australia, while Singapore's prime retail market experienced sustained rental growth. In South Korea, corporates led retail investment, focusing on value-add opportunities.
Outlook Amid Global Uncertainties
Despite uncertainties stemming from U.S. fiscal policies and the Federal Reserve's decision to maintain interest rates, Asia Pacific remains a prime destination for global capital. "While restrictive rate expectations challenge debt markets, resetting property valuations across Asia Pacific are creating strategic opportunities for investors," said Pamela Ambler, Head of Investor Intelligence, Asia Pacific at JLL.
With central banks beginning to reduce interest rates and regional transparency improving, Asia Pacific offers a compelling case for long-term investment and sustained growth in 2025.
