While macro uncertainty continues to weigh on sentiment, capital is returning to APAC commercial real estate with greater selectivity. Investment activity is expanding, but performance is increasingly uneven across markets and sectors. The strongest opportunities are being driven by capital rotation, pricing dislocations, and structural shifts in the supply/demand outlook.
APAC real estate remains challenging, but not without opportunity.
Investors are becoming more selective, focusing on sectors with strong structural demand, experienced operators and greater visibility on returns. Data centres, living sectors, conversion strategies and ageing-related real estate are gaining traction, while capital is shifting towards JVs, club deals and platform structures that offer greater control and clearer exit paths.
Read the full report by downloading the PDF here.
APAC markets are facing a more uneven macro environment,
Higher rates and energy volatility are creating a more uneven macro backdrop across APAC, with energy-importing markets most exposed to renewed price pressures.
Japan’s yield curve is steepening
Japan’s yield curve has steepened sharply, with 10-year yields rising to 2.7% and the 30-year yield reaching 4.0%, its highest level since the maturity was introduced in 1999. The 2-year to 10-year spread has also widened to 130 bps, its highest level in decades, reflecting growing pressure at the long end of the curve.
Partial stake deals have reached record highs
Some JV partners are taking different views on market timing, capital recycling and future asset performance, leading to more partner buyouts and partial stake sales. In some cases, capital partners are changing while the manager and underlying strategy remain in place.
Portfolio rebalancing to accelerate in APAC
Portfolio rotation is expected to gather pace as investors reduce exposure to traditional sectors such as office and retail, while increasing allocations to data centres and living sectors.
Hong Kong’s past turning points highlight the value of timing
Historically, Hong Kong has been one of APAC’s most volatile markets, with some of its strongest periods of value growth occurring shortly after market turning points - highlighting the importance of timing in past cycles. So, with Hong Kong nearing the mature end of its correction, the turning point shifts into focus for those looking to capture the upswing.
AGEING POPULATIONS ARE BECOMING ONE OF APAC’S STRONGEST LONG-TERM REAL ESTATE DEMAND DRIVERS
Korea stands out as living-sector demand is expected to shift from younger renters towards older households, supporting future opportunities in senior living, healthcare and related real estate sectors.
Download the full report, '