• Regional net absorption increased by 1.6 million sqm Q-o-Q in Q2 2026 and was positive across all Tier-1 markets. Leasing demand was steady in key markets, supported by the 3PL, e-commerce, and manufacturing segments.

• Completions remained on a downward trajectory amid construction delays. Combined with resilient demand, this has led to declining vacancy in parts of the region.

• Rental trends diverged across the region, with sustained growth in select markets. While rental declines continued in Greater China, the pace of decline has shown signs of moderation.

Regional net absorption picked up in Q2 2026, increasing by 1.6 mil sqm Q-o-Q. Positive net absorption was recorded across all Tier-1 markets, supported by steady leasing demand from 3PL, e-commerce, and manufacturing occupiers in Tokyo, Seoul, Sydney, and Melbourne. In Greater China, leasing activity was primarily driven by cost-conscious tenants pursuing upgrade relocations.

Completions continued to fall in Tokyo and Seoul. Beijing, Shanghai, Hong Kong, and Singapore recorded minimal or zero new supply this quarter, with projects either postponed or limited to owner-occupation. On the other hand, both Sydney and Melbourne saw decreased completion levels as developers await pre-commitments before breaking ground.

Rental trends diverged across the region this quarter, with sustained growth in select markets including Tokyo, Seoul, and Melbourne. Rents were stable in Singapore and Sydney. While rental declines continued in Greater China, the pace of decline has shown signs of moderation. Transaction activity was mixed across markets. Tokyo continued to see strong demand from both domestic and overseas investors, particularly for value-add properties. Meanwhile, Seoul recorded several major transactions in the quarter. Both Sydney and Melbourne saw a rise in investment volumes, driven by portfolio sales. Investors in Greater China maintained their cautious stance amid challenging market conditions.

Outlook
Across the region, markets are in a rebalancing phase with demand recovery outpacing supply additions across several key markets. Tokyo and Seoul are leading this trend, benefiting from supply constraints and strong e-commerce-driven demand. Greater China is similarly posting some early signs of recovery. Rents in Shanghai are expected to stabilise over the medium term, as supply waves fade and leasing demand recovers.