Dec 04, 2025

Summary and Investment Advice:

The APAC real estate market in Q3 2025 shows modest growth, with a 2% increase in investment volume to USD 39.5 billion. Key highlights include strong rental growth and low vacancy in Tokyo Grade A offices, expected rental growth in Jakarta offices, and growing hotel investments in Bangkok. Conversely, oversupply pressures are causing office rent declines in Hong Kong and likely rising vacancies in Bangkok offices by 2030. Singapore’s upcoming government land sales indicate robust future residential and commercial development. Notable transactions include CDL’s acquisition of a prime London hotel and the launch of Dubai’s luxury waterfront project anchored by Aman and Rosewood.

Recommended Investment Opportunities:

1. Jakarta Grade A Offices:

   With expected rental growth of 2-3% in 2026 and strong occupancy, Jakarta’s office market offers stable income and appreciation potential. Target well-located business districts for acquisition or development.

2. Tokyo Grade A Offices:

   Extremely low vacancy (0.7%) and rising rents (+3.2%) make Tokyo’s premium office sector a low-risk, steady-yield investment. Focus on prime office buildings in central business areas.

3. Bangkok Hotel Sector:

   Despite office market challenges, the hotel sector is expanding with notable investment volumes and growing interest in leasehold properties. This sector benefits from tourism recovery and offers diversification and attractive yields.

4. Singapore Residential and Commercial Land:

   The 1H2026 Government Land Sales Programme introduces significant new residential and commercial supply. Early-stage investments or partnerships in these development sites, especially executive condominiums and mixed-use projects, can capture future value appreciation.

5. London Prime Hospitality Assets:

   CDL’s GBP 280 million acquisition of Holiday Inn Kensington with a 6% yield reflects strong demand for core hotel assets in global cities. Similar prime hospitality or mixed-use investments offer good income with capital preservation.

6. Dubai Luxury Waterfront Development:

   The Dubai Peninsula project anchored by Aman and Rosewood signals robust luxury market growth. Investors focusing on high-end residential and hospitality mixed-use developments should consider exposure here.

Markets to Approach with Caution:

• Bangkok Office Market: Oversupply is expected to push vacancy rates up to 30% by 2030, likely causing rent declines and capital value pressure. Avoid speculative office investments until absorption improves.

• Hong Kong Offices: Anticipated rent declines up to 5% due to oversupply suggest a cautious stance on office assets here.

Conclusion:

Prioritize investments in markets with strong fundamentals—Tokyo and Jakarta Grade A offices, Bangkok and London hotel sectors, Singapore’s upcoming development sites, and Dubai’s luxury waterfront project. Remain cautious about oversupplied office markets in Bangkok and Hong Kong to avoid downside risks.

Stay Well!