The scale of commercial real estate investment in the Asia-Pacific region for 2024 has increased by 23% compared to a year ago, surpassing $130 billion.
Global integrated real estate services corporation JLL (Jones Lang LaSalle) noted this in its fourth-quarter report for 2024.
According to JLL, the scale of commercial real estate investment in the Asia-Pacific region for 2024 recorded $131.3 billion (approximately 190 trillion won), a 23% increase from the previous year. The investment amount for the fourth quarter was $34.9 billion (approximately 50 trillion won), marking a 10% increase compared to the same period last year, continuing a growth trend for the fifth consecutive quarter.
In 2024, cross-border investment in the Asia-Pacific region amounted to $23.8 billion (approximately 34 trillion won), reflecting a 43% increase compared to the previous year. This is attributed to the high interest of foreign investors in office and logistics assets in key markets like Australia, Japan, Singapore, and Korea, according to JLL.
In the Korean office market, global investment management firms have expanded their share of office investments, deeming the current market prices as attractive investment opportunities. Notably, transactions of assets with value-add opportunities, such as rising rents and changes in usage, have been prominent. Despite rising interest rates, Japan attracted attention from foreign investors based on favorable yield spreads, with active cross-border transactions in the hotel and logistics center sectors.
Stewart Crow JLL Capital Market CEO for the Asia-Pacific region said, "Due to the stabilization of asset values and improvement in lending conditions, new opportunities are opening up for investors in various markets," adding that "2025 is expected to be a favorable year for market entry, especially for proactive investors in key sectors such as office and logistics to benefit from reduced competition."
Additionally, annual investment amounts increased across all major real estate sectors. The Asia-Pacific region's office market showed a strong rebound in 2024, with high tenant demand contributing to the market's growth momentum.
The office investment amount for 2024 reached $48.8 billion (approximately 71 trillion won), marking a 12% increase compared to the previous year. In the fourth quarter, Korea led office investments in the region based on a decrease in senior loan interest rates for premium office buildings, with investors showing a tendency to prefer medium-sized stable assets amid a still limited large-scale fundraising environment.
The logistics sector has continued to establish itself as a preferred asset class. High demand in Japan, Australia, and India led to successful large-scale portfolio transactions, resulting in yield compression in this sector. The logistics investment amount in the Asia-Pacific region for 2024 totaled $33.4 billion (approximately 48 trillion won), a 26% increase from the previous year. Domestic and foreign investors maintained an optimistic outlook on the Japanese logistics market based on rising rents, and Australia's logistics investment also rebounded, particularly in key gateway cities such as Sydney and Melbourne.
Retail sector investments also rose by 28% in 2024 compared to the previous year. In Australia, private capital led the purchases, while Singapore's prime retail market showed a continuous upward trend in rents. In Korea, corporations drove retail investments, and future retail transactions are expected to focus on assets that offer value-add opportunities through redevelopment and office conversions, along with core assets that have undergone price adjustments.