Asia-Pacific commercial real estate investment volume hits $63.8 billion in Q3 2025
Asia-Pacific commercial real estate investment volumes reached $63.8 billion in the third quarter of 2025, marking the highest level on record and a 56.8 per cent increase on the same period last year, a report said on Wednesday.
Additionally, the growth in activity nearly doubled the volumes recorded in Q2.
This was driven by several major entity-level transactions and the completion of deals that had been delayed by extended due diligence periods, according to Knight Frank's 'Q3 2025 Capital Markets Insights'.
Year-to-date transaction volumes have already reached 80 per cent of 2024's full-year total, with Asia-Pacific investment expected to surpass $195 billion in 2025, representing a 10 per cent year-on-year (YoY) increase.
"Q3 2025’s record $63.8 billion transaction volume marks a genuine market revival in Asia-Pacific, driven by policy clarity and capital rate stabilisation," said Christine Li, Head of Research, Asia-Pacific, Knight Frank.
Investors are shifting from cap rate compression strategies to external factors such as active asset management and income growth.
This renewed confidence is directing substantial capital into strategic and defensive sectors, such as the living sector and logistics, he added.
According to the report, cross-border investment into the region totalled $17.8 billion during the quarter, up 72.1 per cent from Q2 and 28.6 per cent year-on-year.
Australia attracted the highest volume of cross-border capital at $5.0 billion, primarily directed to the living and industrial sectors.
Japan followed with $3.5 billion, concentrated in office and multi-family assets, while South Korea secured $2.3 billion, predominantly in industrial and office properties.
“Cross-border investors are increasingly confident in the fundamentals behind key Asia-Pacific markets. Constrained future supply, particularly for institutional-grade office and logistics assets, combined with stabilising prices, creates compelling investment opportunities," said Dan Dixon, Head of Capital Markets, Asia-Pacific, Knight Frank.
South Korea led the region with $14.3 billion in transactions, up 93.6 per cent year-on-year, recording the highest growth rate across Asia-Pacific markets.
Office assets accounted for 70.9 per cent of South Korea’s total volume, as sellers moved to divest ahead of potential CBD oversupply, while rental growth expectations remain positive.
