Korean Office Deals Lead 15% Jump in APAC Real Estate Investment

Commercial real estate investment in Asia Pacific jumped 15 percent year-on-year in the second quarter of 2025 to hit $31.2 billion, bringing the first-half total to $67.6 billion, up 17 percent, according to JLL.

The surge was led by South Korea, as Asia’s fourth-largest economy recorded the highest year-on-year volume growth in APAC of 72 percent during the quarter to reach $6 billion, the consultancy said in its mid-year Capital Tracker report.

Office properties accounted for 77 percent of Korean market volume as sellers sought to cash out ahead of oversupply on the horizon. Seoul office deals reached their highest level since the second quarter of 2021 on higher capital deployment from domestic institutions and lower financing costs, said Stuart Crow, CEO of APAC capital markets at JLL.

“With the Bank of Korea lowering its key rate to 2.5 percent in May, we look forward to seeing continued momentum in the next quarter with this favourable financing environment,” Crow said.

Gangnam Tower Trade

The second quarter saw seven Korean office assets trade for at least $250 million, led by IGIS Asset Management’s purchase of the Seoul International Tower in Gangnam district from KB Asset Management for $640 million, according to the report.

In Japan, where investment volume rose 31 percent year-on-year to a region-best $7.6 billion during the quarter, offices dominated as domestic investors were the most active, JLL said. The top deal in the country was Mitsubishi Estate’s acquisition of the Akasaka Park Building, a mixed-use complex in Tokyo’s Minato ward, from a sponsored REIT for $559 million, narrowly beating Warburg Pincus’s $554 million buy of the Tokyo Beta shared living portfolio from Lone Star Funds.

The office sector led overall investment activity in APAC during the second quarter, accounting for $13.3 billion in transactions — up 24 percent year-on-year. Industrial volume rose 12 percent to $6.3 billion, retail transactions climbed 4 percent to $5 billion and living sector investments spiked 92 percent to hit $3.6 billion.

“While investors are navigating through economic noise and geopolitical tensions, Asia Pacific commercial real estate continues to draw in global capital, demonstrating the region’s fundamental strength and the resilience of the asset class,” Crow said.

Private Wealth Pouring In

Private wealth investment volume in the second quarter surged 32 percent year-on-year to $4.7 billion, with office assets accounting for 45 percent of transactional activity — up from 28 percent of deals in the year-earlier quarter, JLL said. Retail was the second most favoured asset class among private wealth investors, capturing 26 percent of transactions in Q2.

Rate cuts by the region’s central banks are lowering debt costs and improving the transaction environment, said Pamela Ambler, JLL’s APAC head of investor intelligence.

“However, investors are now underwriting slower-growth scenarios with the assumption that tariffs will remain in place, leading to extended timelines and essential contingency provisions in deals,” Ambler said. “Markets such as South Korea and Japan continue to demonstrate resilience, and investors seeking long-term growth can find opportunities amidst the turbulence.”