Real assets emerged as one of the strongest global performers in 2025, with Asia-Pacific markets standing out despite challenges from shifting monetary policy, inflation, energy-transition demands and geopolitical risk, according to the Asia Pacific Real Assets Association’s TrendWatch report. The recovery began in 2024 and was firmly established this year.

Momentum that had already been building in sectors such as hospitality, multifamily housing and logistics has broadened to retail and office assets. Higher construction costs have constrained new supply, while firmer landlord negotiations have driven a sharp rise in office rents. In Tokyo, office vacancy rates have fallen below 3 per cent, supporting higher equity and Reit valuations. Many Japanese Reits have returned to cashflow growth, boosting dividends and net asset values, with market pricing recovering from a 20 per cent discount to near NAV.

Logistics assets in Greater Seoul and key Malaysian corridors also exceeded expectations, supported by strong leasing activity and selective rental growth. Infrastructure assets remain in favour, particularly data centres, grid-support assets and renewables linked to the energy transition. Investor confidence in data centres was reinforced by the IPO of NTT DC Reit in Singapore, the city’s largest Reit listing in a decade.

Investor interest in China Reits has also increased, aided by a low interest rate environment. With 77 listed vehicles, the sector is reshaping China’s real estate capital markets, while long-term apartment leasing, energy infrastructure and digital assets remain resilient. More asset types, including hotels and offices, are expected to be added, creating opportunities to acquire discounted core assets ahead of future Reit exits.

Overall, despite ongoing geopolitical and trade uncertainty, real estate conditions across Asia-Pacific improved in 2025. Falling interest rates late in the year lifted investor confidence and are expected to support stronger investment activity in 2026, underpinned by structural demand from e-commerce, data consumption and decarbonisation.

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