Cross-Border Investment in APAC Real Estate Rose 13% in H1 Amid Overall Drop: MSCI

Cross-border investors deployed 13 percent more capital into income-generating real estate in Asia Pacific during the first half of 2025 than in the year-earlier period, led by US-based players, according to MSCI.

Stripping out Greater China, however, cross-border investment in APAC reached $18.9 billion during the January-June period, marking a 40 percent year-on-year surge, the data provider said in its Asia Pacific Capital Trends report. The growth came despite the region’s overall 13 percent year-on-year drop in investment volume during the half to $69.8 billion.

Industrial deals turned in the weakest performance of the first half among property segments, with volume falling 34 percent percent year-on-year to $12.6 billion, while data centres — a separate category — performed strongest with an 83 percent spike to $5 billion, including $3.5 billion in transactions in the second quarter alone.

“With the industrial sector’s streak of outperformance tapering off in recent months, investors are gradually pivoting back towards a more balanced allocation across the core sectors,” said Benjamin Chow, head of real estate research for Asia at MSCI. “But the recovery within each sector has not been widespread — the upswing has been driven primarily by markets where income growth features strongly.”

Gaw Mall Buy Leads

Hong Kong-based Gaw Capital Partners scored APAC’s biggest single-asset acquisition tracked by MSCI in the first half, teaming with Singaporean group Patience Capital to buy the Tokyu Plaza Ginza mall for $1 billion, as Tokyo continued to lead the region’s metro areas with $13.2 billion in investment volume.

The top office deal completed during the period was Hines and the Abu Dhabi Investment Authority’s partial sale of One Museum Place in Shanghai to a fund backed by China Post Insurance, with the transaction valuing the 60-storey skyscraper at around $1.5 billion.

Industrial activity was led by SoftBank’s purchase of the Sharp Sakai LCD factory in Osaka for conversion into an OpenAI data centre in a deal valued at $663.7 million, per MSCI, while the richest hotel trade was Japan Hotel REIT’s purchase of the Hilton Fukuoka Sea Hawk from Mizuho Leasing for $414.6 million.

The largest multi-asset deal was Blackstone’s $2.6 billion buy of the Tokyo Garden Terrace Kioicho commercial complex from Seibu Holdings. The US private equity titan billed the transaction as the largest-ever real estate acquisition by a foreign investor in Japan.

Trading Europe for Asia

While US-based investors were the keenest foreign buyers of APAC real estate during the first half, they pulled back in Europe as their acquisitions in that region fell 29 percent year-on-year. Meanwhile, activity picked up among Japanese, Singaporean and Canadian investors, according to MSCI’s Europe Capital Trends report.

Cross-border acquisitions of European real estate fell below €20 billion ($23.5 billion) in the second quarter and stood at 42 percent of total investment volume, dipping beneath their long-run average of 45 percent, the report said.

“US-headquartered investors are the number one cross-border buyer of European real estate, well ahead of any other European or global source of capital,” MSCI said. “Therefore, the drop-off in deal activity is notable, especially as equity funds like TPG, Starwood, KKR and Ares were big buyers of European real estate in 2024. Even Blackstone, perennially the top buyer in Europe, slipped down the rankings of most active players in the first half of the year.”