U
LI and PwC’s 2026 Emerging Trends in Real Estate® Asia Pacific report shows a cautiously optimistic mood among professionals, yet points to wide disparities across markets and sectors. Tokyo tops the investment list for the third consecutive year, followed by Singapore, Sydney, Osaka, and Seoul. Respondents favor cities with stable economies, low vacancy, and high liquidity.

    Investors remain hesitant about China, citing underperforming legacy assets; Mainland China and Hong Kong are still distressed, though Shanghai and Hong Kong are expected to see more activity in 2026. The data‑center sector is projected to outperform, with confidence also in logistics, self‑storage, multifamily housing, and student accommodation. Office and retail demand stays subdued, though Tokyo and Singapore offices may benefit from tight vacancy.

    The trend toward operationally focused assets and rental‑growth strategies continues. Geopolitical tensions are a concern, but the main challenge is construction‑cost inflation, especially in mature markets, which is likely to curb new development. Sustainability initiatives are increasingly seen as delivering ROI.

    Alan Beebe, ULI Asia Pacific CEO, notes rising optimism but warns of regional volatility. Stuart Porter of PwC highlights that rising rents have eased rate‑pressure risks and that capital is shifting toward Japan and Australia. Mark Cooper of ULI Asia Pacific predicts a more favorable interest‑rate environment in 2026, with falling rates in Australia and South Korea and modest increases in Japan.

    AI is beginning to reshape back‑office functions, potentially dampening office recovery even as remote work declines. Data‑center tenants’ bargaining power, power limits, and tech progress remain variables that could challenge assumptions.

    The full report is available through the ULI Knowledge Finder.