Thought Leadership

Co-produced by Vistra Fund Solutions and APREA

The APAC real assets market is full of potential, but also operational, tax, and regulatory friction. This exclusive report reveals where the biggest opportunities lie, what’s holding investors back, and how leading firms are navigating the complexity.

Inside the Friction Index 2025:

• Which APAC markets and asset classes are attracting institutional capital
• Where investors face the highest levels of friction and why
• How leaders use outsourcing, AI, and tech to gain a competitive edge
• The trends redefining real assets: ESG, AI, and regulatory shifts

India is undergoing a dramatic demographic shift that presents both unprecedented opportunities and significant challenges for the senior living sector. The country’s senior population is projected to more than double from 156.7 million in 2024 to 347 million by 2050, representing 21% of the total population. This transformation is driving substantial growth in the senior living market, which is currently valued at INR 15,500 crore (USD 1.8 billion) and expected to expand to INR 64,500 crore (USD 7.7 billion) by 2030.

Despite this promising growth trajectory, the market remains severely undersupplied and in its early stages. With only 1.3% penetration compared to mature markets like the US and Australia that exceed 6%, India’s senior living sector has vast untapped potential. The current supply of approximately 20,000 units falls dramatically short of the estimated demand of 2.27 million households by 2030, highlighting the enormous opportunity for developers, operators, and investors in this rapidly evolving sector.

Summary: Colliers’ Global Capital Flows Report (September 2025) highlights cautious but steady growth in real estate investment activity worldwide, with Asia Pacific maintaining a leading role despite global headwinds.

Key highlights include:

• Singapore, Japan, and Hong Kong ranked among the top 10 global sources of cross-border capital.
• Japan and Australia remain top global capital destinations, reflecting sustained investor confidence.
• Office and retail sectors are leading the regional recovery, with office assets reclaiming the top spot in transaction volumes.
• Land-led development continues to dominate, with seven of the top 10 global destinations located in APAC.

Real estate investments during H1 2025 were largely driven by domestic investors in most Asia Pacific markets, while offshore interest persisted in key hubs such as Australia, India, Singapore and Hong Kong.

The region’s investment outlook is expected to remain steady and resilient through 2025 and into 2026, supported by a lower interest rate environment, moderating inflation and sustained economic growth across key markets.

Key insights:

• Office remains the asset class of choice, with retail gaining pace.
• South Korea, Japan and Australia drove nearly two-thirds of investment volumes.
• Growing appetite for alternative asset classes such as data centres, life sciences and student housing.
• Growing confidence of local investors, underscoring resilience across the region.

As workplace patterns continue to change, occupiers in Asia Pacific are accelerating the return to office and elevating the workplace experience.

CBRE’s 2025 Asia Pacific Office Occupier Survey, with insights from nearly 300 corporate real estate executives, highlights:

• Workplace effectiveness: Insufficient small rooms (48%) and lack of vibrancy (35%) remain top challenges. Adjusting workstation sizes and desk-sharing ratios can help improve efficiency.
• Tighter attendance protocols: 82% of occupiers now impose consequences for non-compliance (+16 percentage points y-o-y), with office utilisation improving in 2025.
• Core and quality preference: Smaller companies display the strongest appetite for growth. 65% of occupiers planning to move prefer CBD cores, but most availability is in non-core areas.

India’s office market has reached a major milestone of 1 billion sq ft in H1 2025, valued at INR 16.07 trillion (USD 187 billion), accounting for 27% of the country’s real estate market.

• Growth & Value: India is now the 4th largest office market globally by area. Bengaluru, NCR, and MMR collectively hold 72% of the total office stock value.
• Supply & Demand: The supply-demand ratio has declined to 0.41, with Grade A stock making up 53% of the supply and single-digit vacancy rates, indicating robust demand.
• Development Landscape: No single developer has an all-India footprint. Office development remains uneven across cities, and residential profitability is undermining commercial supply.
• Retrofitting Opportunity: About 30% of India’s office stock is retrofit-ready, mostly located in CBD and SBD zones. Retrofitting can significantly boost rental income, occupancy, and asset value.
• Future Outlook: India is on track to hit 2 billion sq ft by 2036–2041, with cities like Hyderabad and Pune leading stock growth in recent years.

Economic Rent and New Office Development: Increasing construction costs, rising land values, and asset repricing are leading investors to scrutinise theoretical rents more closely when planning new office developments. Investors are looking more closely at ‘economic rents’, which measure the rental income needed to justify development costs and are reassessing office developments across the region. 

Regional Variations:  Most markets in Asia Pacific have reported significant growth in economic rents over the past five years, led by Australia. In Asia, Singapore, Seoul and Beijing have seen the greatest growth.

Postponed New Office Developments: CBRE expects Asia Pacific office developments will continue to be postponed as investors find it difficult to justify commencing work on new schemes. This will constrain the supply pipeline in the medium term. As a result, the region’s office markets will adjust to the tighter supply-demand imbalance, which will help rental growth align with the change in construction and land costs.

Office Investment Hotspots: With the office outlook improving and pricing at the top of cycle in most APAC markets, investors are expected to continue to target acquisitions of existing stock. Markets with strong rental prospects such as Australia, Japan, India, and Korea, will attract investment demand in H2 2025.