Commercial real estate (CRE) investment in Asia Pacific climbed 38% year over-year (YoY) to US$ 45.5 billion in Q2 2026, according to global real estate consulting firm JLL (NYSE: JLL). For the first half of 2026 (H1), volumes totalled US$ 92.5 billion (+35% YoY), marking the strongest H1 volume on record despite rising energy inflation, currency volatility, and supply chain disruptions. Strong semiconductor and automotive demand propped up industrial manufacturing, while robust global AI capital expenditure supported the region’s tech-driven export growth.
Japan posted US$ 10.6 billion in Q2 2026 (H1: US$23.8bn), up 39% YoY (H1: +12%). Volumes grew across all sectors, with office leading activity as core capital acquired assets. Value-add investors seeking below market rents drove the industrial sector, while data centres experienced unprecedented demand thanks to the government’s push for local data sovereignty and Gen AI.
Australia registered US$ 8.9 billion in Q2 2026 (H1: US$14.7bn), rising 82% YoY (H1: +68%). This was the highest Q2 volume since Q2 2021, driven by four large-scale portfolio transactions. A-REITs, unlisted property trusts, developers, and private investors were highly active in the industrial sector. Retail continues to draw capital as REITs re-engage with the sector and private investors acquired assets below AU$ 50 million.
Singapore traded US$ 6.7 billion in Q2 2026 (H1: US$18.2bn), rising 108% YoY (H1: +238%). Two large deals anchored the quarter: CICT acquired Paragon mall from Cuscaden Peak for US$ 3 billion, while IOI Properties acquired Asia Square Tower 2 from CICT for US$ 1.9 billion.
“While investors are navigating a tricky geopolitical backdrop and the reversing of the regional rate-cutting cycle due to stubborn inflation, the sheer scale of transactions this quarter shows that capital remains abundant,” Stuart Crow, CEO, Asia Pacific Capital Markets, JLL told RETalk Asia. “Rental growth prospects across nearly all major markets and sectors are very compelling, driven by a lack of supply and rising replacement costs. The return of mega-deals, in both office and retail demonstrates that large global investors are capitalising on repriced premier core assets.”
Regionally, investment flows showed a clear structural shift toward technology-supporting assets and value add real estate. Across major markets like Japan and Australia, sectors were heavily propelled by strong data centre demand and logistics portfolio acquisitions. Simultaneously, investors selectively targeted office and hotel assets offering immediate yield stabilisation or pricing adjustments, even as elevated interest rates widened the buyer-seller gap in markets like South Korea.
Hong Kong volumes surged 129% YoY in Q2 2026 (H1: +90%) to US$ 3.1 billion in Q2 2026 (H1: US$4.7bn), driven by a strong pickup in retail and office activity. Office deals were notably driven by assets under receivership, including 299 Queen’s Road Central and One Bedford Place, though positive office leasing momentum is expected to revitalise the market. Retail price corrections have largely paused, keeping closed deal volumes stable.
India logged US$ 1.6 billion in Q2 2026 (H1: US$3.1bn), rising 23% YoY in Q2 2026 (H1: +51%). Activity remained highly concentrated in the office sector, where volumes rose an impressive 125% on strong investor conviction, with domestic funds, developers, and REITs acting as the primary acquirers.
“The persistent uncertainty has forced investors to underwrite deals with greater caution, yet the appetite for APAC real estate remains remarkably intact,” Pamela Ambler, Head of Investor Intelligence, Asia Pacific, JLL told RETalk Asia. “Investors are pivoting toward sectors with strong structural demand – such as data centres in Japan and logistics in Australia – or targeting assets that offer immediate yield stabilisation, like Hong Kong’s recovering offices.”