Asia Pacific Real Estate Market Outlook 2026
Recalibrate and Innovate
January 29, 2026 15 Minute Read
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2026 Asia Pacific Real Estate Investment Market Outlook Event Recording
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The Asia Pacific commercial real estate market is poised for another solid year in 2026, with both investment and leasing activity forecasted to strengthen, backed by the region’s resilient economy.
Despite the bright outlook, there remain headwinds, with trade related volatility and geopolitical tension among the challenges set to exert a strong influence over real estate decision-making in the coming year.
The real estate landscape is shifting, especially in the office sector where prospects are brightening, and in the logistics sector, where performance is cooling after a prolonged period of robust growth. Across all sectors, medium-term supply is projected to contract, marking a significant shift from the current oversupply situation. These changes to market fundamentals will exert a strong bearing on investors’ allocations to individual sectors, while more limited room for yield compression will compel property owners to place a stronger focus on income growth potential.
Against this backdrop, occupiers and investors must reassess current strategies, portfolios and requirements, while embracing new sectors, technologies and approaches, leading us to adopt the theme of “Recalibrate & Innovate” for this year’s report.
On the economic front, Asia Pacific GDP growth is forecasted to slow to 3.9% in 2026 from the relatively robust 4.3% in 2025, driven by softer growth in mainland China, India and Japan. With interest rates in most Asia Pacific markets continuing to decline in 2025, the rate cutting cycle is forecasted to slow further or finally come to an end this year.
Investment is set to increase this year as net buying intentions continue to rise. With office leasing activity in many CBDs picking up, CBRE expects investor appetite for offices to strengthen significantly this year. Limited yield compression will shift investors’ focus towards rental growth as a driver of returns.
Office leasing demand is forecasted to strengthen in 2026 as occupiers’ strong desire to be in core locations with high-quality buildings drives activity in mature markets. Expansionary demand will be seen from tech firms, wealth management and professional services companies. Supply is expected to peak while rents will remain on an upward track in most markets.
While most logistics markets will still see rising rents, momentum will slow as occupiers turn more selective towards expansion amid softer regional economic growth. New stock is set to fall sharply from 2027 as developers adjust to slower rental growth. 3PLs and e-commerce operators will remain key drivers of demand, with automation-ready warehouses keenly sought after.
With sales picking up and clarity around trade policy improving, retail leasing activity in most markets is expected to strengthen from 2025. Fashion & apparel along with sports & athleisure will drive demand. Rents are expected to sustain steady upward momentum across most markets, supported by tight vacancy in prime locations and limited future supply.
In the hotel sector, tourism arrivals are close to recovering to pre-pandemic levels, meaning that growth this year is expected to slow from last year. Event-driven tourism will remain a key growth driver in 2026. While RevPAR growth across most markets should continue, the rate of growth will be more limited as ADRs continue to normalise.
Economy
Recalibrate
Prepare for slower economic growth: GDP growth in Asia Pacific is expected to slow in 2026 after a year in which the region’s economy displayed resilience amid tariff volatility and global economic uncertainty. India, mainland China and Southeast Asia are forecasted to exhibit the fastest growth in the region although the rate of GDP expansion will be slower compared to 2025. Markets with stronger growth this year will include Korea and the Pacific as fiscal and monetary measures, alongside improved domestic sentiment, stimulate economic expansion.
Make ready for the end of the interest rate cut cycle: With interest rates in most Asia Pacific markets continuing to fall in 2025, the rate cutting cycle is forecasted to slow further or finally come to an end in 2026. Exceptions include Japan, where the rate hiking cycle is expected to continue, and Australia, where interest rates could rise once more amid mounting inflationary pressure.
Innovate
Look to AI boom to cushion trade headwinds: The AI economy should help drive demand for semiconductors and other advanced high-tech manufacturing outputs in 2026, especially in Taiwan, Korea and Japan. This will help offset trade weakness in other sectors, especially as semiconductors generally remain exempt from U.S. tariffs. Mainland China continues to invest heavily in AI although the country is subject to restrictions on semiconductor imports.
Monitor new policies and urban planning schemes: With 2026 marking the start of mainland China’s latest five-year plan, the central government will unveil a series of new policies to support growth. In India, regulatory changes to enable Small and Medium Real Estate Investment Trusts (SM REITs) will provide investors with a new channel to allocate capital. Progress will continue on several major urban development schemes, including Western Sydney International Airport (due to open mid-2026), Hong Kong SAR’s Northern Metropolis, and Singapore’s 2025 Master Plan.
