As interest rates across the region continued to stabilize, Asia-Pacific (APAC) commercial real estate investment rebounded in 2025, with total transaction volume reaching $201 billion, a 13.7 percent year-on-year increase that sat squarely within Knight Frank’s projected 10 to 15 percent growth range. Knight Frank projects APAC transaction volumes to rise a further 5–10% in 2026.
APAC commercial real estate investment rebounded in 2025 as rates stabilised, lifting volumes to $201B—up 13.7% year-on-year.
The improvement was underpinned by renewed allocations toward quality, well-located assets, as occupier fundamentals firmed and capital sought durable income streams after the post‑2021 volume decline. According to the Knight Frank Capital Markets Insights report, the rebound was most visible in the retail sector.
Quarterly patterns reflected both momentum and subsequent selectivity. APAC volumes reached a record $63.8 billion in Q3 2025, marking the strongest quarterly performance of the cycle, before easing to $56 billion in Q4.
The fourth quarter pullback equated to a 10 percent quarter-on-quarter decline and a 7.4 percent reduction year-on-year, indicating that investors, having deployed actively through the first nine months, became more discriminating on pricing, leasing risk, and asset quality as markets normalized.
Retail emerged as a principal growth engine within the regional mix, ranking among the top-performing asset classes by percentage expansion. Full-year retail investment rose 31.2 percent from 2024, while Q4 retail volumes jumped 109.5 percent quarter-on-quarter and were nearly double the level recorded a year earlier.
This rebound was linked to steady consumer demand and improving occupier markets, which supported underwriting for income-generating retail formats, particularly those benefiting from established catchments and resilient footfall. Asia-Pacific captured 10 percent of global private real estate fundraising in 2025, securing US$21.3 billion in commitments.
Broader capital markets conditions also influenced transaction execution and financing structures. The recovery trend reinforced private capital‘s rising role, with 44 percent of family offices indicating plans to increase real estate allocations, and non-bank financing gaining traction among institutional clients.
Private credit fundraising increased 40 percent, and the regional private credit market was projected to expand by $90 to $110 billion by 2028, with Australia expected to capture nearly half of that growth. India’s alternative investment funds expanded tenfold to 1,532 vehicles, adding to liquidity options as global GDP was forecast to maintain steady growth.
Against this backdrop, Knight Frank characterised 2025 as a stabilisation phase, in which rate certainty and leasing metrics channelled capital toward prime stock, even as late-year bidding became disciplined.
