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The Asia Pacific commercial real estate market is poised for another solid year in 2026, with both investment and leasing activity forecasted to strengthen, backed by the region’s resilient economy.

Despite the bright outlook, there remain headwinds, with trade related volatility and geopolitical tension among the challenges set to exert a strong influence over real estate decision-making in the coming year.

The real estate landscape is shifting, especially in the office sector where prospects are brightening, and in the logistics sector, where performance is cooling after a prolonged period of robust growth. Across all sectors, medium-term supply is projected to contract, marking a significant shift from the current oversupply situation. These changes to market fundamentals will exert a strong bearing on investors’ allocations to individual sectors, while more limited room for yield compression will compel property owners to place a stronger focus on income growth potential.

Against this backdrop, occupiers and investors must reassess current strategies, portfolios and requirements, while embracing new sectors, technologies and approaches, leading us to adopt the theme of “Recalibrate & Innovate” for this year’s report.

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China’s REIT market is entering a new growth phase as commercial property assets such as offices, hotels, retail, and mixed-use developments are incorporated into the public REIT framework. Regulatory enhancements and a more supportive interest rate environment are improving the relative appeal of C-REITs, creating compelling income-driven opportunities for both domestic and international investors. As the eligible asset base broadens and market depth increases, the C-REITs sector presents significant long-term potential.

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KEY TAKEAWAYS

  • Retail sales (excluding motor vehicles) rose in both October and November, while food and beverage (F&B) sales returned to growth in October.
  • Although conditions improved in 2H/2025, softer demand in 1H/2025 weighed on overall performance, leaving islandwide retail vacancy broadly unchanged in Q4/2025.
  • According to Savills’ basket of retail properties, average monthly rents in both the Orchard and Suburban areas registered modest year-on-year (YoY) growth.
  • Supported by a tight supply pipeline and sustained tourism recovery, occupancy and rents—particularly in prime shopping districts—are expected to post modest gains of 1% to 2% this year. For the suburban malls, rents are still forecast to increase by the same amount as vacancies in prime malls remain low
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KEY TAKEAWAYS

  • Total leasing activity for factory and warehouse space increased modestly in 2025, with Savills’ basket of prime warehouse and logistics rents recording stronger growth. In contrast, rental growth for prime multiple-user factory space continued to moderate.
  • Cautious investor sentiment persisted, weighing on strata industrial sales and leading to a decline in total industrial investment sales in 2025.
  • Stronger demand for industrial assets with shorter remaining land tenures supported accelerated price growth for 30-year leasehold industrial properties within Savills’ basket. Conversely, price growth for freehold and 60-year leasehold industrial properties slowed.
  • Rental growth in the business park segment strengthened slightly, while high-spec industrial space experienced subdued rental growth in 2025.
  • Regional supply chains continue to be reshaped by recent US tariffs and by companies seeking cost advantages in neighbouring countries. Against this backdrop, rental growth for general warehousing space is expected to moderate in 2026, while rents for multiple-user factory space are projected to rise due to their cost-effectiveness.
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CBRE’s 2026 Asia Pacific Investor Intentions Survey uncovered a further improvement in buying intentions across most markets in Asia Pacific this year, with over 57% of respondents indicating their preference to buy more real estate in 2026.

Net buying intentions in Korea, Australia and Singapore strengthened while those in Japan remained stable. While their intentions remained negative, investors in both mainland China and Hong Kong SAR exhibited improved net buying intentions in 2026 compared to last year.

Sector preference shifted in this year’s survey. Offices rose to become the most preferred sector for the first time in six years, with industrial & logistics and the living sector rounding out the top three. Data centres continue to climb up the list of investor preferences, placing fourth this year.

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KEY TAKEAWAYS

  • Companies increasingly adopted a “flight-to-quality” approach to their office location strategy, and Grade AAA offices continued to be absorbed, supported by the tight pipeline of new top-tier space.
  • According to Savills’ data, the vacancy rate for CBD Grade A offices fell by 0.3 of a percentage point (ppt) quarteron-quarter (QoQ) to 6.7% in Q4/2025. For the full year, vacancy declined by 1.3 ppts, reversing the 1.5 ppts increase recorded in 2024.
  • With a limited pipeline of new office developments and low vacancies, average CBD Grade A office rents continued to rise for the seventh consecutive quarter by 0.3% QoQ to S$9.96 per sq ft in Q4/2025. For the whole of 2025, office rents rose by 1.8%, outpacing the 1.1% growth seen in 2024.
  • For 2026 and 2027, Grade A CBD rents are expected to rise across the board. Grade A space will be dominated by large and financially strong companies and family offices while non-Grade A space would, over time, be either redeveloped or experience rising vacancy levels as their tenancy base consists of smaller subgroups of industries that face greater margin pressures. Our forecast for Grade A CBD office rent for 2026 remains at +2%.
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Asia Pacific’s commercial real estate market is entering a critical phase in 2026, showing strong resilience after challenges in 2025. With interest rates steady and capital markets improving, optimism is rising among investors and occupiers.

Based on our APAC Outlook 2026 and other reports, Six for 2026 spotlights the major trends influencing the region. These include changes in office supply and increased investment in AI-powered data centres, highlighting where growth and strategic opportunities are emerging.

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KEY TAKEAWAYS

  • Real estate investment sales in Singapore closed the final quarter of 2025 with total transactions amounting to S$10.97 billion. While this represented a 3.3% quarteron-quarter (QoQ) decline from the preceding quarter, activity levels were still resilient. It should be noted that the third quarter had a high base of S$11.35 billion.
  • Investment activity from S-REITs, institutional investors, and high-networth individuals remained healthy, underpinned by lower financing costs and strong fundamentals across most property segments. In addition, the impact of US President Trump’s tariffs proved less severe than initially anticipated.
  • The outlook for the investment sales market in 2026 is shaped by more than just the trajectory of interest rates. Fluid and volatile geopolitical developments are increasingly adding complexity to the picture. Given these conditions, we are maintaining our investment sales forecast for 2026 at approximately S$34 billion, in line with 2025 levels. Among physical assets, sectors likely to perform better this year include office, retail, and properties with redevelopment potential.

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Asia Pacific real assets are entering a more selective but opportunity-rich phase in 2026, as capital shifts decisively toward markets and sectors with clear income visibility, supply constraints, and structural demand drivers. Opportunities are most compelling where fundamentals underpin returns, particularly in Japan offices and multifamily, Australia build-to-rent and prime retail, Singapore’s resilient REIT-linked assets, and India’s offices and data centres supported by expanding global capability centres (GCCs) and digitalisation.

Across the region, pricing discipline and constrained new supply are creating favourable conditions for rental growth, while technological adoption and the energy transition are opening new avenues in data centres and infrastructure. 2026 presents a window to deploy capital into assets combining resilience, growth, and long-term thematic relevance.

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By Shai Greenberg; Hiroshi Takahashi; Akira Ota

Purpose

This study examines trends in the foreign ownership ratio of Japanese real estate investment trusts (REITs) from 2014 to 2023. Using panel regressions, it explores how firm characteristics, macroeconomic factors and policy interventions shape foreign investment patterns, offering insights for managers, investors and policymakers.

Design/methodology/approach

Using panel regression (fixed and random effects) on 33 J-REITs, this study analyses firm-level, asset type, sponsorship and macro-financial factors as well as the impact of inclusion in the FTSE EPRA/NAREIT Global Index effect on foreign ownership.

Findings

Market capitalization, yen appreciation, hotel sector exposure and global index inclusion are positively associated with foreign ownership, whereas higher leverage, Bank of Japan J-REIT purchases, stronger ROA, higher policy rates and logistics sector exposure are negatively associated.

Practical implications

The findings provide actionable insights: for investors, market size, sector and index inclusion signal liquidity and accessibility; for J-REITs, asset risk–return characteristics, sector choice and leverage discipline matter; for policymakers, index engagement and monetary policy influence foreign capital flows.

Originality/value

To the best of our knowledge, this is the first study to apply panel regression to foreign ownership of J-REITs, highlighting sectoral and macro-financial drivers and providing evidence from the world’s third-largest REIT market.

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