Commercial real estate ( CRE ) investment volumes in the Asia-Pacific region reached US$63.8 billion in the third quarter of 2025, marking the highest level on record and a 56.8% increase on the same period last year, according to a recent report.

The growth in activity nearly doubled the volumes recorded in Q2, driven by several major entity-level transactions and the completion of deals that had been delayed by extended due diligence periods, finds property consultancy Knight Frank’s Q3 2025 Capital Markets Insights report.

Investment momentum across Asia-Pacific, the consultancy notes, is expected to hold firm into the final quarter of 2025, supported by clearer monetary policy direction and improved liquidity.

Year-to-date transaction volumes have already reached 80% of 2024’s full-year total, the report notes, with Asia-Pacific investment expected to surpass US$195 billion in 2025, representing a 10% increase year on year.

Cross-border investment into Asia-Pacific was led by Australia, which attracted the highest volume of cross-border capital at US$5 billion, the report points out, primarily directed to the living and industrial sectors. Japan followed with US$3.5 billion, concentrated in office and multi-family assets, while South Korea secured US$2.3 billion, predominantly in industrial and office properties.

The Chinese mainland recorded US$13.5 billion in investment volume, rising 29.9% year on year, the report highlights, with data centres representing nearly one-third of total volume activity. This was driven mainly by Bain Capital’s divestment of data centre operator WinTriX DC Group’s Chinese mainland business to a consortium led by Guangdong Hec Technology for US$3.9 billion.

Singapore, meanwhile, posted US$3.8 billion in investment volume, up 28.6% year on year, driven by the completion of several large-scale transactions, including Lendlease Global Commercial Reit’s US$356 million sale of Jem’s office component to Keppel Land, and UOL Group’s US$292.3 million divestment of Kinex to Kinex Times Square and Xiaohong Property Management.

Hotel transactions rebounded to US$6.2 billion, up 67.7% year on year, while retail volumes totalled US$7.7 billion, down 13.4% year on year as investor sentiment remained measured amid global trade uncertainties.

“Cross-border investors are increasingly confident in the fundamentals behind key Asia-Pacific markets,” says Dan Dixon, Knight Frank’s head of Asia-Pacific capital markets. “Constrained future supply, particularly for institutional-grade office and logistics assets, combined with stabilizing prices create compelling investment opportunities.”

Christine Li, the consultancy’s head of research for Asia-Pacific, adds: “Investors are shifting from cap rate compression strategies to external factors, such as active asset management and income growth. This renewed confidence is directing substantial capital into strategic, defensive sectors, such as the living sectors and logistics.”