As we step into 2026, the investment landscape in Asia Pacific is marked by a transition from resilience to optimism. The region, having weathered some economic turbulences in 2025, now presents a more stable and promising environment for investors. With easing policy uncertainty, moderated inflation, and a supportive monetary backdrop, the stage is set for strategic capital deployment across key sectors and markets.
The easing of tariff tensions and the stabilization of monetary policies are pivotal drivers of economic recovery in 2026. Central banks across the region are maintaining accommodative stances, with selective interest rate cuts fostering a conducive environment for business reinvestment. This, coupled with improving global business confidence, signals a ripe opportunity for investors to act decisively. Prime assets in high-demand locations are poised to deliver robust returns as markets recalibrate.
Increasing Demand for Data Centre and Living Assets Regionally, demand for data centers and living assets are surging, driven by rapid adoption of AI and cloud services, and limited housing supply in key metropolitan cities. With Asia Pacific accounting for only 26% of global data center capacity despite housing 60% of the world’s population, the growth potential is immense. At the same time, the living sector benefits from urbanization, limited housing supply, and migration-led population growth, with Australia and Japan poised for strong rental growth in 2026 driven by tight vacancies. Opportunities also abound in Singapore, South Korea, and Hong Kong where co-living and student accommodations are gaining traction.
Market-Specific Strategies
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Japan: Japan's office investment outlook remains strong, with Tokyo's Central Grade A office market showing robust demand, at a vacancy rate below 1%, and projected rental growth at a CAGR of 5% through 2027, driven by limited new supply and high pre-commitment rates. In addition, the living sectors, including rental housing, senior living, and student housing, are gaining traction as demographic shifts drive demand. Urban areas such as Tokyo, Osaka, Nagoya and Fukuoka present strong potential, with high population density and consistent rental demand.
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Australia: Australia’s office market, after significant repricing during the rate-hiking cycle, now offers attractive opportunities with stabilizing fundamentals and growing investor confidence. The Logistics and Industrial sector stands out, fueled by tight vacancies, strong demand, and rising rents. Retail assets are gaining traction as investor interest grows and prime locations remain in high demand. The living sector shows strong potential, driven by urbanization, limited housing supply, and rising rental demand in major hubs like Sydney and Melbourne, further supported by population growth and low vacancy rates. Lastly, the hospitality sector is poised for growth, with international tourism rebounding and inbound travel surpassing pre-pandemic levels.
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Singapore: The city-state’s strategic position as a financial hub ensures continued demand for prime office assets. In the office market, CBD Grade A office rents are projected to grow by 4-7%, reflecting strong demand. The retail sector is supported by limited new supply and climbing prime retail rents, particularly in Tier 1 malls. Industrial rents are expected to increase by up to 2% year-on-year, driven by steady demand. In the residential sector, private residential prices are forecast to grow by 2-4% annually, underpinned by sustained property demand. Furthermore, the hospitality sector is set for moderate growth, with island wide RevPAR showing positive momentum.
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South Korea: Grade A offices in Korea’s major business districts are set to benefit from stable corporate investment and anticipated transaction volume growth, driven by expected rate cuts, though rent adjustments in the CBD may occur due to rising vacancies. Retail investments are expected to focus on assets that can deliver unique offline experiences, with the flexibility to repurpose underperforming properties. Prime logistics and dry centers with strong end-user accessibility are projected to attract demand, supported by rising rental prices for high-quality assets. In the hotel sector, opportunities are concentrated on 3- to 4-star hotels in Seoul, bolstered by increasing tourist demand and limited new supply, while alternative lodging facilities are likely to gain from hotel room shortages.
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Greater China: In the Chinese mainland, expansion of domestic demand is set to be the primary driver of economic growth. The office market, while facing supply-demand imbalances, is poised for growth fueled by government-driven advancements in technology industries. The retail sector is also undergoing a transformation, with domestic brands and experiential consumer trends reshaping the market. Additionally, the logistics and industrial sectors are benefiting from efficiency gains, technology adoption, and global supply chain shifts, creating opportunities in the manufacturing sector especially in industries such as new energy, new materials, and aerospace.
In Hong Kong, end users and cash-rich investors are expected to focus on prime office assets, capitalizing on opportunities created by corrected pricing levels. Additionally, properties with conversion potential into student accommodation and other rental housing will likely remain highly desirable, supported by strong market fundamentals and sustained demand.
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India: In the office sector, major cities like Bengaluru, Mumbai, and Delhi NCR present strong investment prospects for high-quality assets and REIT-type portfolios, driven by robust leasing demand. The residential sector offers opportunities in urban redevelopment projects and luxury living developments targeting affluent buyers, while mid-tier developers present potential for private equity partnerships. In the logistics and industrial sector, the Delhi-Mumbai Industrial Corridor and other key infrastructure corridors stand out for stabilized portfolios and manufacturing parks, with less focus on speculative ground-up developments. For data centers, tech-driven hubs such as Hyderabad, Chennai, and Pune emerge as prime locations, fueled by growing demand for collocation and hyperscale cloud facilities supported by advancements in cloud, AI, and fintech.
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