NEW DELHI: Real estate investments in the Asia Pacific region surged by 19.2% year-on-year in Q1 2026, according to a report by Savills.
This growth was driven by a positive shift in investor sentiment, a rebound in office transactions, and stronger cross-border capital flows, although activity was primarily focused on core markets and income-generating assets.
Prime office investments saw a significant rise of approximately 25.7% year-on-year during this period, led by major cities like Tokyo and Singapore, where vacancies decreased and rents increased.
Additionally, industrial and logistics properties continued to attract capital throughout the region, bolstered by demand from AI-driven manufacturing, semiconductor exports, data centers, and infrastructure investments.
According to the report, India emerged as a significant market in the Asia Pacific for industrial and logistics investments, as well as data center expansion and infrastructure-related real estate opportunities.
Cross-border investments were predominantly focused on Japan and Singapore during this quarter. Singapore achieved investment sales of S$11.48 billion in Q1 2026, marking an impressive increase of nearly 95% year-on-year.
In Japan, favorable occupier demand, limited supply, and attractive yield spreads contributed to rising prices. Prime office rents in Tokyo’s Central 5 Wards reached record levels during this timeframe.
Investment trends varied across other markets. In China, investment volumes fell year-on-year as previous investment strategies were unwound; however, price corrections began to garner attention from both domestic and international investors.
Hong Kong experienced an uptick in non-residential investments, primarily driven by office and hotel transactions. Investors were also seeking repositioning opportunities, including converting hotels into student housing.
The report highlighted that data centers and technology-linked infrastructure continued to shape capital flows across the Asia Pacific region.
Taiwan saw robust commercial property transactions in the quarter, mainly driven by technology companies acquiring owner-occupied factories. Similarly, Malaysia’s data center and IT infrastructure acquisitions represented over half of its industrial investment activity.
