The Asia-Pacific real estate market is seeing a strong resurgence in cross-border investments, with volumes reaching US$36.3 billion in Q3 2024, a 15.7% year-on-year increase, according to Knight Frank’s latest capital markets report.
By the end of 2024, cross-border transactions are expected to grow by 50%, hitting a two-year high of around US$48 billion. This growth comes as global real estate markets ease, with global cross-border deals showing near recovery at US$95.1 billion, just 1.3% below 2023 levels.
Neil Brookes, global head of capital markets at Knight Frank, attributes the upward momentum to recent rate cuts and stabilizing asset prices, making debt-financed acquisitions more appealing. “Asia-Pacific is benefiting from renewed investor confidence, and we expect this pace to accelerate, potentially outpacing the global recovery,” he says.
Data centres have emerged as the standout sector, accounting for 46% of cross-border investments in Q3 2024. Major deals, including Blackstone and Canada Pension Plan’s US$16 billion acquisition of data centre platform AirTrunk, underscore the region’s growing reliance on artificial intelligence (AI) and cloud technologies. Excluding AirTrunk, the sector still managed to attract US$544 million, marking a 36.3% increase year-on-year.
Christine Li, head of research at Knight Frank, highlights data centres as a long-term growth driver, noting the surge in digital infrastructure demand. “The growth in data centre investments reflects a fundamental shift in real estate priorities. As generative AI and digital technologies continue to reshape our world, we see unprecedented demand for these specialized assets.”
Traditional sectors like office and industrial properties also saw robust activity, with the office sector capturing 35% of Q3 investments. Several high-profile transactions included PAG's US$572 million acquisition of Mapletree Anson in Singapore, CapitaLand Investment and Kookmin Bank's US$320 million purchase of Golden Tower in Seoul, and Deka Immobilien's US$258 million investment in 333 George Street, Sydney.
Industrial assets captured 32% of the market with US$6.5 billion in cross-border investments. Despite a 12.3% year-on-year decline, major deals included Hankyu Hanshin Properties and KWAP’s US$2.2 billion purchase of an 11-property portfolio in Australia, and Warburg Pincus and Lendlease's US$1.2 billion acquisition of a seven-property portfolio in Singapore.
With liquidity improving and substantial deals in the pipeline, Knight Frank expects continued momentum into 2025.