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Yuke Xie

US investment in Asia-Pacific real estate jumped 31 per cent year on year in the second quarter, as investors chased yields and stable growth in markets such as Australia, Singapore and Japan amid looming tariff challenges.
Mainland China, meanwhile, was weighed down by an ongoing property crisis and mounting default risks.
Cross-border real estate investments in Asia-Pacific reached US$12.1 billion in the second quarter, a 50.1 per cent surge year on year and the highest level since the third quarter of 2022, according to a Knight Frank report on Thursday. US investors led the charge, pumping US$4.97 billion into the region, accounting for 41 per cent of the total.
“US investors have always been active in the Asia-Pacific region, which offers exposure to both emerging and mature markets, enabling a balance between potential and stability,” said Christine Li, head of research for Asia-Pacific at Knight Frank.
“Compared with the US and Europe, certain Asia-Pacific markets offer more attractive pricing and yields, especially in the office, [residential] and data centre sectors,” she said. The recent moves by many of the central banks in the region to lower interest rates – in contrast with the US Federal Reserve’s move to hold rates steady – also helped to reduce borrowing costs and improve returns, she added.

Australia, Japan and Singapore were the top destinations because their regulatory transparency and market liquidity partially offset macroeconomic headwinds such as slowing growth, according to Knight Frank.
Investments into Australia surged 119 per cent year on year to US$3.8 billion in the second quarter, the consultancy added. Residential rents increased by almost a quarter in the country’s state capitals from June 2018 to April 2025, with nearly 83 per cent of all new tenants reporting higher rents, according to the Australian Bureau of Statistics.
Two of the largest deals in the second quarter involved Australian assets. In June, Canada’s Brookfield Asset Management sold its retirement-home operator Aveo to the Living Company, parent of Australia’s largest student accommodation provider, for US$2.5 billion.
In April, US property investor Greystar bought an Australian student housing portfolio from Singapore sovereign wealth fund GIC and Singapore-listed Wee Hur Holdings for US$1 billion.
“Australia’s office and residential sectors are primed for future growth, as increased velocity in the return-to-office underwrites future growth in office rents,” said Lucy Mallick, capital lead for Australia at Colliers International.
While rental growth was beginning to moderate after a post-border reopening surge, it remained elevated, underpinned by strong population gains from international migration, she added.
Meanwhile, Australia’s growing inflation and key deductions were also contributing to the build-to-rent sector’s growth, which was expected to attract more capital as returns improve, said Knight Frank’s Li.
Singapore was another investment hotspot, offering a level of predictability and trust that served as “intangibles” influencing investor decisions beyond financial feasibility, said Alan Cheong, executive director of research and consultancy at Savills Singapore.
The city-state recorded US$2.37 billion in cross-border deals in the second quarter, up 593 per cent from a year earlier and 158 per cent from the previous quarter.
The vacancy rate for grade A office space in Singapore’s central business district was low compared with major gateway cities, holding at around 7 per cent. That was lower than the average of around 25 per cent for major US cities, according to Cheong.
Japan, which posted a 63 per cent year-on-year decline in second-quarter cross-border investments, drew US$2.4 billion, with the bulk of the investments flowing into residential and industrial assets.
The main contributing factor was the interest rate – the lowest among major economies, according to Hiroshi Okubo, Asia-Pacific head of investor thought leadership at CBRE. “[The low interest rate] together with prospects of further upside in rents offer investors with relatively attractive spreads,” he said.
He added that a tightening supply-demand balance – driven partly by labour shortages and rising construction costs – had pushed the overall office vacancy rate in Tokyo to 2.5 per cent, one of the lowest levels globally.
In contrast, the property sector in mainland China was under “significant stress”, Knight Frank said, as cash-strapped developers struggled to sell inventory amid lacklustre demand.
The only noteworthy transaction in the second quarter took place in April, when Singapore-based GLP acquired a data centre in Beijing through a US$359 million fund.


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Property

Cross-border real estate investments in Asia-Pacific reaches US$12.1 billion in the second quarter, the most since the third quarter of 2022


Cross-border real estate investments in Asia-Pacific reaches US$12.1 billion in the second quarter, the most since the third quarter of 2022.


US leads second-quarter Asia-Pacific real estate deals with assets worth US$5 billion

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Cross-border real estate investments in Asia-Pacific reaches US$12.1 billion in the second quarter, the most since the third quarter of 2022

Cross-border real estate investments in Asia-Pacific reaches US$12.1 billion in the second quarter, the most since the third quarter of 2022