JLL: Commercial real estate investment in the Asia Pacific region surged to $31.2 billion in the second quarter of 2025.

Jones Lang LaSalle (JLL) latest data shows that the total investment in commercial real estate in the Asia-Pacific region reached 31.2 billion US dollars in the second quarter of 2025, an increase of 15% year-on-year. Against the backdrop of continued global economic uncertainty, despite investors maintaining a cautious attitude and transaction cycles lengthening, the total investment in commercial real estate in the Asia-Pacific region in the first half of the year still reached 67.6 billion US dollars, an increase of 17% year-on-year. The performance of the South Korean market is particularly outstanding, with investment in the second quarter exceeding 6 billion US dollars, a substantial increase of 72% year-on-year, ranking highest in terms of growth rate in the Asia-Pacific region. Office property transactions accounted for as high as 77% of the total, reflecting owners actively seizing the window period before the peak of supply in central business districts to dispose of assets. The hotel sector also showed strong activity, benefiting from improved operating performance, with multiple transactions achieving premium deals. Japan remains the most active market in the Asia-Pacific region, with investment in the second quarter reaching 7.6 billion US dollars, a 31% year-on-year increase. Cumulative transactions in the first half of the year reached 21.3 billion US dollars, a 23% year-on-year increase. Domestic investors in Japan continue to increase their investments in office properties, driving transaction volumes in residential properties to a three-year high. As global trade friction continues, investors are scrutinizing the fundamentals of assets and tenant structures more rigorously. A survey of 75 investors in the Asia-Pacific region by Jones Lang LaSalle (JLL) shows that residential, life sciences, and healthcare assets, with their essential characteristics, have become the most resilient sectors in terms of risk mitigation. Stuart Crow, CEO of Investment and Capital Markets at Jones Lang LaSalle (JLL) in the Asia-Pacific region, states that amid the current complex economic environment and geopolitical situation, commercial real estate in the Asia-Pacific region continues to attract global capital, confirming the region's strong economic fundamentals and the resilience of asset categories. In terms of asset categories, office properties in the Asia-Pacific region led the market in the second quarter with transactions totaling 13.3 billion US dollars, a 24% year-on-year increase. Transactions from South Korea reached a peak in four years, while Japan maintained a trend dominated by domestic funding. Industrial logistics assets achieved 6.3 billion US dollars in transaction volume, a 12% year-on-year increase; retail properties maintained stable growth with 5 billion US dollars in transaction volume, a 4% increase. Residential properties showed a particularly strong performance, with transaction volumes in the second quarter reaching 3.6 billion US dollars, a significant increase of 92% year-on-year, with the Japanese market contributing half of the transaction volume. It is worth noting that transactions from private investors reached 4.7 billion US dollars in the second quarter, a 32% year-on-year increase. Office properties remain the most favored asset category for private investors, accounting for 45% of total transactions in this quarter, a significant increase compared to 28% in the same period in 2024; retail properties maintained a stable share of 26%, second only to office properties. In the second quarter of 2025, the total investment in commercial real estate in mainland China reached 5.2 billion US dollars, a 7% year-on-year increase. Investors continue to maintain a cautious attitude, especially institutional investors who are more cautious in their commercial real estate decisions. During the current price adjustment process, more competitive high-quality assets are beginning to appear in the market, creating key opportunities for investors to allocate assets. In terms of investor structure, the market transactions are mainly dominated by domestic enterprises and high-net-worth investors, with small and medium-sized asset transactions being the mainstream. In terms of asset categories, office properties rank first in transaction volume, with purchasing demand showing diversified characteristics, including investments by state-owned enterprises as well as self-use demands from technology, new media, and manufacturing companies. It is worth noting that prime urban long-term apartment assets, with relatively stable income performance, continue to attract investors. Shudong Pang, Head of Investment and Capital Markets in China at Jones Lang LaSalle (JLL), states that as a result of the adjustment in valuation logic and the rise in capitalization rates for commercial real estate, it is expected to stimulate the willingness of more types of funds and investors with higher return requirements to enter the market. Continual enhancement of domestic demand stimulus measures at the policy level are expected to attract more buyers with actual usage needs and local investment institutions to retail properties. Looking ahead, investment strategies will become more specialized and diversified, while high-quality assets in core areas will continue to maintain their irreplaceable investment value.