• Tenant demand for prime, high-quality office spaces continues to strengthen as multinational firms reinstate in-office mandates and emphasize employee-centric, sustainable environments—placing talent attraction and retention at the core of their real estate strategies.

• Regional office supply is set to peak this year, with 6 million sqm of new office space scheduled for completion by end- 2026. Early leasing will be critical to manage cost pressures, secure premium assets, and stay ahead of evolving market conditions.

• Asia Pacific office investment reached USD 18.8 billion in Q4 2025, rising 35% year-on-year, driven by renewed investor confidence and selective targeting of markets with clear rental growth prospects. For the full year, the office sector accounted for 45% of total direct real estate investment, underscoring its position as the region’s most resilient and active asset class.

The Asia Pacific office market ended the year with strong momentum, marked by robust leasing activity, rising rents for premium assets, and a clear flight-to-quality trend. Leasing demand remained broad-based across the technology, financial services, and professional services sectors, while greater clarity on trade policy encouraged firms to make long-term real estate commitments. Regional prime office rents grew by 1.3% quarter-on-quarter—the fastest pace in three years, while Asia Pacific office vacancy declined to 14.2% despite ongoing new supply additions.

Performance across Asia Pacific’s key office markets remained mixed. India led regional growth, supported by strong demand from Global Capability Centres, technology firms, and flexible workspace operators, driving solid rental growth across major SBD submarkets. Tokyo’s market remained exceptionally tight, with vacancy below 1% and rents surging 17% year-on-year amid persistent occupier demand and limited availability. Hong Kong’s Central submarket recorded its first quarterly rental growth in three years, spurred by strong absorption in premium assets and accelerated IPO activity. Singapore maintained resilience under a constrained supply pipeline, while Australian CBDs benefited from limited completions and firm demand for quality space. Conversely, cost-sensitive submarkets in Mainland China experienced slower decision-making, with landlord concessions key to sustaining occupancy levels.

Asia Pacific Office investment volumes totalled USD 65.4 billion as activity showed selective improvement, led by domestic institutions and REITs focusing on markets with clear rental growth, such as Japan and South Korea. Conversely, Greater China’s subdued rental outlook maintained investor caution and complicated price discovery.

Outlook
Market fundamentals for premium assets are expected to remain solid with vacancy rates projected to tighten further amid limited new supply. Over 6 million sqm of new stock is scheduled for completion in 2026, led primarily by China and India. Beyond that, supply growth is anticipated to moderate as elevated construction costs dampen development pipelines in more mature markets. In the near term, both occupiers and investors are expected to prioritize markets with clear rental growth potential and healthy market fundamentals.