APAC Q1 Property Investment Jumps 22% to $51B as Singapore Leads Recovery

Trades of income-earning properties in Asia Pacific rose 22 percent year-on-year during the first quarter to $51.1 billion, with Singapore posting a record result as a revival in cross-border capital helped broaden the region’s investment recovery.

Investment in Singapore surged more than fivefold during the January-to-March period to $7.9 billion, marking the city-state’s highest quarterly tally on record and unseating Tokyo as Asia Pacific’s most active metro for the first time since 2021, according to MSCI’s latest Asia Pacific Capital Trends report. Japan saw transaction volume slide 32 percent to $12.2 billion as rising interest rate pressures weighed on dealmaking.

China notched the region’s highest country-level volume at $13.4 billion, up 55 percent from a year earlier, lifted by Bain Capital’s $4 billion disposal of its Chindata data centre platform and Dalian Wanda’s sale of seven malls to a PAG-backed consortium as the first batch of a 48-asset portfolio transfer.

“Asia Pacific’s commercial real estate markets have entered 2026 with considerably more momentum than most might have expected at the start of the year,” said Benjamin Chow, MSCI’s head of private assets research for Asia. “There are no guarantees on momentum continuing at the current pace, however, as the outlook for the rest of the year has been complicated by the outbreak of the US-Iran war late in the quarter.”

Office on Top

Cross-border investment climbed 64 percent year-on-year to $18.2 billion in the quarter, pushing foreign capital’s share of overall activity to 36 percent, well above the historical quarterly average of 29 percent as institutional investors rotated back into office and retail assets, according to the report.

Office assets led regional activity with $21 billion in trades during the quarter, up 25 percent from a year earlier, while industrial investment rose 33 percent to $10.3 billion and retail volume climbed 31 percent to $9.7 billion.

Singapore’s record quarter was anchored by several megadeals, including Asia Pacific’s largest single-asset transaction of the period: the Qatar Investment Authority’s sale of a $2.7 billion stake in Asia Square Tower 1 into Hongkong Land’s new Singapore office vehicle backed by QIA, Dutch pension giant APG and a Southeast Asian sovereign fund.

The deal for the 1.3 million square foot (120,774 square metre) tower accounted for a substantial portion of the $4.3 billion in transactions tied to Hongkong Land’s Singapore core fund during the quarter, MSCI said.

Singapore also hosted the region’s largest retail transaction during the quarter as Chinese investor Elegant Group agreed to acquire the Clementi Mall from Cuscaden Peak, a Temasek-controlled joint venture of CapitaLand Investment and Mapletree, for $629 million.

Allgreen Properties rounded out an active quarter for Singapore office investment, with Robert Kuok’s privately held group purchasing 78 Shenton Way from a PGIM Real Estate fund backed by Canada’s QuadReal for $472 million.

The report also pointed to Link REIT’s pending sale of Swing By at Thomson Plaza at a 3.7 percent cap rate, some 180 basis points below the yield at which the Hong Kong-listed trust acquired the mall three years ago, as evidence of lower financing costs driving deals in the city-state.

Japan Cooling

Japan’s biggest transaction of the quarter came through Brookfield Asset Management’s acquisition of the Dentsu headquarters building in Tokyo from Hulic and Mizuho Leasing for $1.9 billion, according to MSCI’s ranking of top deals.

The country’s top industrial trade saw Blackstone acquire the Tokyo C-NX warehouse from Nippon Express with Mizuho Leasing acting as intermediary in a deal valued at $646 million.

MSCI said Japan’s volume decline reflected a moderation from the record pace seen in early 2025 rather than a collapse in investor appetite, noting that capital values had remained firm across the country’s core sectors despite rising interest rates.

In Australia, where investment volume eased 8 percent year-on-year to $5.4 billion, Australian Retirement Trust completed the country’s largest deal of the quarter with its $601 million purchase of a 19.9 percent stake in the Westfield Sydney mall from Scentre Group.