Singapore, India, Hong Kong Drive APAC Property Investment Growth

In a strong demonstration of market resilience, Asia-Pacific (APAC) commercial real estate investment volumes surged by 18% year-on-year in the first quarter of 2026. According to data from CBRE, total investment activity reached US$46.2 billion, supported by robust capital deployment in key gateway markets. Despite a complex global macroeconomic backdrop and heightened geopolitical tensions, investors are re-engaging selectively with the region, focusing on defensive income streams and markets with long-term structural growth potential.

Market Leaders: Singapore, India, and Hong Kong

The growth trajectory was primarily driven by three core markets that have outpaced regional averages:

• Singapore: The market is witnessing a unique dual dynamic where asset owners are increasingly willing to sell to capture favourable pricing, while buyer demand remains healthy and continues to improve.
• India: Commercial property demand remains resilient, underpinned by stable leasing activity and a growing interest in institutional-grade assets as part of a broader "flight to quality" trend.
• Hong Kong SAR: Reflecting a significant turnaround, Hong Kong recorded some of the strongest buying intention readings in the region, signalling a renewed appetite among institutional and private investors for core urban assets.

Divergent Regional Cap Rate Trends

While overall sentiment remains well above pandemic-era levels, CBRE’s Cap Rate Survey indicates that local conditions are increasingly divergent. Australia is currently experiencing upward pressure on cap rates as investors adopt a more cautious, repricing-driven approach amid interest rate uncertainty. In contrast, Japan has limited scope for further cap rate compression, while mainline China is showing early signs of stabilisation. In China, domestic insurers are becoming more active buyers, increasing their direct allocations to real estate as a strategic asset class.

Sector Focus: Grade A Office and Niche Assets

Grade A office assets have been identified as the most attractive sector for capital deployment across the APAC region in 2026. Beyond traditional commercial sectors, student housing in mainland China is gaining traction due to highly favourable supply-demand dynamics. Ada Choi, CBRE’s Head of Research for Asia Pacific, noted that sustained high construction costs are likely to constrain new development starts in the medium term. This tightening of future supply could potentially create a supply-demand imbalance that would benefit existing asset owners and long-term investors.

Navigating Geopolitical and Economic Risks

Geopolitical tensions remain the primary downside risk for the regional outlook, particularly affecting sentiment in Korea and Pacific markets. Additionally, interest rate uncertainty continues to weigh on investor behaviour in Japan and Australia. However, Greg Hyland, CBRE’s Head of Capital Markets for Asia Pacific, emphasised that resilient occupier fundamentals are supporting the medium-term outlook. Investors are increasingly prioritising markets and assets that offer defensive income, ensuring that the APAC region remains a high-conviction destination for global real estate capital through the remainder of the year.

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