According to Savills’ Asia Pacific Investment Quarterly (APIQ) Q2/2025 report, investor sentiment across the Asia-Pacific region remains cautious amid escalating geopolitical tensions. The industrial and logistics sectors have been most affected due to the prolonged uncertainty surrounding the US trade policy. However, demand for prime assets in key markets remains strong, supported by attractive investment yields and solid leasing fundamentals. 

The Investment Landscape of Asia-Pacific

In Q2/2025, the Asia Pacific region continues to face a complex and volatile global landscape, driven by escalating geopolitical tensions and uncertainty surrounding the US trade policy. This has led to a downward revision of regional 2025 GDP growth from 3.9% in March to 3.6% in July, according to Oxford Economics. 

The report indicates that amid ongoing global uncertainty and trade tensions, most investors have become more cautious and selective. The preliminary total investment value in the region fell to US$21 billion in Q2/2025, the lowest level in a decade, and representing a 44% decline YoY. However, transactions pending completion or under due diligence, with a total value of up to US$20 billion, if successfully closed, could help improve the quarter’s investment figures. 

Safe-haven countries, including Australia, Japan, South Korea and Singapore continue to rank among the top four preferred investment destinations in the region, supported by resilient market conditions and strong leasing fundamentals in select asset classes. 

Despite a slowdown in overall investment activity in Australia during Q2, the market still attracted nearly half of the region’s cross-border inflows. This indicates that Australia has continued to appeal to global investors, supported by its strong economic outlook, recent rate-cuts and a recovery in asset pricing. Demand remained robust for premium office space in prime areas, as well as for retail and logistics warehouse assets. 

In East Asia, South Korea posted impressive growth in investment volumes and overtook Japan in Q2, driven by several notable office transactions amid falling borrowing costs and low vacancy rates. Although industrial and logistics investment volumes were impacted by delays in deal execution, underlying demand remained resilient. Meanwhile, Japan experienced a decline in investment activity due to rising global uncertainty. However, sentiment remained positive, underpinned by ample liquidity and stable market conditions. Investor appetite was strong among value-added funds, family offices, and ultra-high-net-worth individuals, with a focus on high-quality office assets, retail and hospitality, while recovering interest in logistics assets was noted. 

Singapore’s investment market performed well, fuelled by several high-value transactions in the mixed-use and industrial sectors. Hong Kong’s investment activity also improved compared to the previous quarter. However, a full recovery to pre-pandemic levels will take time, although the recent decline in interest rates may help stimulate activity.

India remains a standout among emerging markets, drawing strong global investor interest in prime assets thanks to its bright economic outlook and the limited availability of high-quality assets. In contrast, investment activity in China remained mute, with transactions mainly dominated by distressed sales and domestic buyers. Foreign investor interest remained limited particularly in industrial & logistics assets, constrained by weak market fundamentals and heightened US-China tensions. 

All asset classes recorded significant declines in Q2, with the industrial and logistics sectors particularly impacted by ongoing uncertainty around US trade policy. Demand for prime assets in select key markets such as offices in Seoul, Tokyo, and Sydney, retail assets in Australia and Tokyo, and the living sector in Australia and Japan remained strong, supported by favourable yield returns and strong leasing fundamentals. 

Despite slower growth, easing monetary conditions in some markets have supported activity levels while real estate capital is showing a preference for safe havens including Australia, Japan, South Korea and Singapore and prime assets in 1st tier cities. India remains a standout, attracting strong global investor interest but continues to be challenged by the limited availability of high-quality asset”, Simon Smith, Regional Head Research & Consultancy, Savills APAC.

Viet Nam: Cautious optimism for long-term growth

The Government is targeting 8% GDP growth in 2025 through structural reforms, boosting public investment in infrastructure and enhanced private sector support. Following the merger of various Government ministries, the number of provinces will be reduced from 63 to 34. In addition, there will no longer be any district-level administration with the goal to form new growth pillars, streamline governance, and attract investment. 

Resolution 68-NQ/TW promotes private sector development through legal reforms, easier access to land and capital, reduced business barriers, and enhanced protection of property rights and fair competition. 

The latest report by the Ministry of Finance’s National Statistics Office (NSO) showed that Viet Nam recorded US$24.09 billion in foreign direct investment (FDI) in the first seven months of 2025, a 27.3% increase YoY. 

Matthew Powell, Director, Savills Ha Noi says: “Despite global uncertainties and trade tensions, Viet Nam remains committed to advancing structural reforms and attracting investment. While challenges persist, steady FDI inflows and ongoing infrastructure development signal cautious optimism for long-term growth”. 

The latest report by the Ministry of Finance’s National Statistics Office (NSO) showed that Viet Nam recorded US$24.09 billion in foreign direct investment (FDI) in the first seven months of 202Amid US tariff concerns, Viet Nam has actively negotiated to narrow differences and tariff cuts on US imports. It is also tightening controls on counterfeit and transhipped products. In parallel, Viet Nam is diversifying trade ties with other strategic partners, using this as an opportunity to restructure its economy, reduce reliance on the US, and deepen international integration. 

The first half of 2025 saw an increase in real estate M&A activity, driven largely by foreign investors and marked by a series of high-profile deals. Notably, CapitaLand acquired a project in Binh Duong from Becamex IDC for US$553 million. Meanwhile, a consortium of Sumitomo Forestry, Kumagai Gumi, and NTT Urban Development partnered with Kim Oanh Group to develop the One World project. Additionally, Nishi Nippon Railroad acquired a 25% stake in the Paragon Dai Phuoc project from Nam Long. 

These transactions reflect growing interest from Japanese, Korean, and Singaporean investors, while also highlighting the emergence of capital from the US and Europe, those markets known for their high standards and long-term investment horizons. 

Industrial real estate remains an attractive investment segment thanks to Viet Nam’s advantages in labour, cost efficiency, and strategic location. Despite concerns over potential trade barriers with the US, the country continues to maintain its key position in the global supply chain. A series of new projects have recently broken ground, including two industrial parks by Becamex IDC in Binh Duong with a combined area of 1,080 hectares (ha), while the 180-ha VSIP Nam Dinh project is scheduled to commence construction in Q3/2025. 

In the residential segment, the trend of suburban development continues to dominate, with several large-scale projects being launched. Vingroup broke ground on the 2,870-ha Vinhomes Green Paradise in Can Gio (HCMC), Sun Group introduced the 96.6-ha Sun Blanca City in Vung Tau, while Masterise Homes marked its presence in Central Viet Nam with the Masteri Rivera Danang project, comprising 1,112 apartment units. 

The retail sector is also seeing notable progress, highlighted by AEON Mall’s expansion into the Mekong Delta with two new projects: AEON Mall Long An (opening in August 2025) and the 8.5-ha AEON Mall Can Tho (currently under construction). 

Moreover, tourism and aviation are benefiting from a strong surge in international arrivals with 9.2 million in the first five months of the year, an increase of 21% YoY. Major initiatives such as APEC 2027 in Phu Quoc, airport expansions, and the establishment of Sun PhuQuoc Airways (SPA) demonstrate the comprehensive development vision shared by private investors and local authorities.

Looking further ahead, Mr. Duy emphasized that transparent project listings, administrative reforms, and synchronized infrastructure investment will help Ho Chi Minh City affirm its position as Southeast Asia’s integrated real estate hub. “The city has opportunities not only to attract FDI into real estate but also to expand into finance, asset management, and related services.” 

In this context, Savills Vietnam has just launched a sales office at the Sala Urban Area, Thu Thiem. This office serves as a comprehensive advisory hub where customers can access a wide range of products – from high-end to affordable units, including international offerings. At the same time, it functions as a training and service quality enhancement center for staff, aiming to deliver a professional and differentiated customer experience. 

Here, clients are not only advised on individual projects but also supported at a higher level: real estate portfolio advisory and management tailored to long-term needs. 

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