While Investment Climate Remains Positive, Market Fluctuations and Uncertain Returns Present Risks

The commercial property sector in Asia Pacific is expected to see stable growth in 2025, supported by a robust regional economy and a favourable interest rate environment. Despite varied performance across different markets and sectors, CBRE’s 2025 Asia Pacific Real Estate Market Outlook suggests that the region remains an attractive destination for investment and leasing activity.

A key trend emerging is the ongoing demand for value-added opportunities, where investors can achieve higher returns. The office market, especially in countries like Australia, Korea, and Singapore, continues to attract substantial investment, while the industrial sector—particularly in Australia and Seoul—is expected to receive considerable interest, particularly in prime logistics assets. CBRE forecasts a 5-10% increase in investment volumes, with Australia, Korea, and Singapore standing out as key markets. Meanwhile, Japan and India are also anticipated to remain attractive for commercial property investors due to ongoing demand in the region.

Ada Choi, CBRE’s Head of Research for Asia Pacific, pointed out that the region’s markets are at various stages in their pricing cycles, resulting in differing return expectations.

Leasing activity in 2025 is predicted to grow at a moderate pace, with occupiers increasingly focused on securing high-quality, sustainable, and wellness-oriented office spaces. The “flight-to-quality” trend will see demand surge for premium properties, particularly in markets like Australia, Korea, and Singapore. In contrast, regions like mainland China, India, and Southeast Asia may offer more flexibility to occupiers, thanks to the surplus of available office spaces.

The region is also set to experience a significant rise in office supply, with an estimated 70 million square feet of new office space set to be completed—the largest amount in two decades. While this may lead to higher vacancy rates, demand for premium properties will continue to drive leasing activity. Cities like Brisbane and Sydney are expected to lead rental growth in their central business districts (CBDs), while Seoul is forecast to see more moderate growth after a period of rapid price increases.

As the commercial property market evolves, CBRE predicts a gradual recovery in investment activity, with sustained demand for high-quality, sustainable spaces across a range of asset classes.