• Occupier demand saw an increase towards the year-end, attributed mainly to an increase in take-up in China, Southeast Asia, and Seoul. However, the opposite trend was noted in Tier-1 markets.

• Vacancy saw a slight fall this quarter. Moving ahead, completions are slated to go down to more reasonable levels, which could lend support to vacancy levels across the region.

• Transaction volumes for the whole of 2025 went down by 18% as compared to the previous year, but trended upwards through the year. As yields compress in major markets, investor activity is poised to increase.

Net absorption saw an increase of 32.8% q-o-q, contributed by an increase in take-up in China Tier-2 cities, Southeast Asia, and Seoul. Notably, the opposite trend was observed in Tier-1 markets – Hong Kong, Sydney and Melbourne recorded negative net absorption while Tokyo and Singapore saw a smaller positive take-up q-o-q.

Quarterly completions rose to 5.2 million sqm this quarter, mainly contributed by increases in China Tier-2 cities, Delhi and Mumbai. Vacancy fell slightly by 0.1 percentage points q-o-q to 11.5%. While the region remains in a high vacancy environment, this is poised for improvement as the market rebalances.

Rents sustained their fall this quarter, weighed down by Greater China as more landlords offered discounts and incentives in a highly competitive leasing market. That said, it appears that rents have fallen to a point which has led to a notable increase in take-up. Outside of Greater China, rents were mostly stable.

Investment activity was a mixed bag this quarter. Seoul noted some mega-scale transactions, while three major logistics facilities were transacted as portfolio deals in Singapore. Demand remained strong in Tokyo. No major transactions were noted in Beijing and Shanghai. Meanwhile, activity slowed in Hong Kong, Sydney, and Melbourne.

Outlook
Moving into 2026, leasing demand is expected to be sustained in most markets, supported by 3PLs, e-commerce retailers, and manufacturers. Notably, with new supply forecasted to come down significantly, Tokyo and Seoul are expected to see declining vacancy, and in turn support rental growth. While Greater China is expected to continue demonstrating subdued leasing and rental performance in the near term, in the medium term, completions are expected to come down to more reasonable levels, and leasing demand should see a relatively stronger recovery.