Knight Frank: Retail Rebound Sparks APAC Real Estate Rise
Real estate investments into Asia Pacific rose in 2025 with retail demand sharply rebounding on the back of improving fundamentals, according to Knight Frank.
Asia Pacific real estate investment rose 13.7 percent year-on-year to $201 billion in 2025, according to a Knight Frank report.
Retail was one of the best performing asset classes, increasing 31.2 percent, with volumes nearly doubling in the fourth quarter. The report attributed the sharp retail rebound to a restoration of investor confidence due to stabilizing interest rates and improving fundamentals. By market, Japan was the largest recipient of international investments at $16.2 billion, up 0.4 percent.
2026 Outlook
In 2026, Knight Frank expects positive momentum to continue with rates stabilizing in most markets across the region and borrowing costs likely to have bottomed. APAC investment volumes are projected to rise by a further 5 to 10 percent, with activity concentrated in core markets including Japan, Australia, Singapore and South Korea.
«Momentum in Asia-Pacific real estate investment continued through the end of 2025, despite a more cautious market backdrop earlier in the year. Improving fundamentals and more stable financing conditions have helped restore investor confidence, particularly in high-quality, income-generating assets,» said Daniel Dixon, head of capital markets, APAC at Knight Frank.
«While geopolitical risks remain, we are seeing capital returning selectively to core markets, such as office and retail in Australia. This trend is expected to carry into 2026.»
