T
he Emerging Trends in Real Estate survey ranked Tokyo, Osaka, Sydney, and Singapore as the top cities for investment prospects in Asia Pacific. However, MSCI data reveals significant market disparities across geographies and sectors. Japan's low interest rates continue to attract investors, but global investors are cautious due to potential domestic rate hikes.

    Australia is gaining attention as local institutional funds lower prices, causing a 20-25% reset in book valuations. Global funds are returning to core markets, with Sydney showing signs of recovery despite Melbourne's high vacancies. China remains in a multi-year downtrend, deterring foreign investment but offering opportunities for established players.

    The report highlights growing interest in emerging markets, particularly Southeast Asia and India, where manufacturing capacity is shifting out of China. Investors are pivoting away from traditional property types due to pricing mismatches, seeking alternative assets with high growth prospects like data centers and multifamily residential properties.

    According to ULI's Alan Beebe, several real estate markets across Asia Pacific are on the cusp of revival, driven by buyers and sellers making strategic concessions in a recalibrated market. PwC's Stuart Porter notes that global investors have pivoted towards Japan, Australia, Singapore, and India, with expanding intra-Asia investments also emerging.

    The report provides insights into future interest rates and bid-offer spreads, offering ballast to values and deal flow. The full report is available on the ULI Knowledge Finder.