Asia Pacific (APAC) real estate investment surged 19.2 per cent year-on-year in Q1 2026, powered by a sharp rebound in prime office assets and robust demand from India, according to a report released on Thursday, 28 May by property consulting firm Savills India. The quarterly uptick signals a broad-based recovery across the region after a period of cautious capital deployment.

India's Role in the Recovery

India emerged as a standout growth market within the APAC region, underpinned by strong occupier demand for industrial and logistics assets, rapid expansion of data centres, and infrastructure-led growth. According to Anurag Mathur, CEO of Savills India, 'India continues to stand out as a high-conviction market within Asia Pacific. As global capital becomes more selective, India's long-term fundamentals and occupier demand continue to attract investor interest across core and emerging asset classes.'

This comes amid a broader global trend of capital gravitating toward markets offering income visibility and liquidity — qualities India's commercial real estate sector has increasingly demonstrated in recent quarters.

Prime Offices Lead the Charge

Prime office investment led the regional recovery, rising an estimated 25.7 per cent year-on-year, supported by tightening vacancies and rental growth in key gateway cities including Tokyo and Singapore. The office segment's resurgence marks a notable reversal from the post-pandemic hesitancy that had weighed on valuations across major APAC markets.

Notably, this is the strongest quarterly office investment reading the region has recorded in recent cycles, reflecting a structural re-rating of prime Grade-A assets in supply-constrained locations.

Industrial, Logistics and AI-Linked Assets in Demand

Industrial and logistics assets recorded sustained investment activity, driven by demand linked to AI-related manufacturing, semiconductor exports, data centre development, and broader infrastructure investment across Japan, Taiwan, India, and Malaysia. Investors increasingly favour these segments for their structural demand drivers, which are less sensitive to short-term economic cycles.

Cross-border investment activity also strengthened during the quarter, with Japan and Singapore accounting for a significant share of international capital flows into the region.

Geopolitical Risks and Uneven Activity

Despite heightened geopolitical tensions and energy uncertainty, improved sentiment and renewed cross-border capital flows supported overall growth, the report noted. However, investment activity remained uneven across markets, with several showing only early signs of repositioning.

In China, investment volumes declined year-on-year as legacy strategies continued to unwind. Pricing adjustments have, however, begun to attract renewed interest from both domestic and international investors, suggesting a potential inflection point for the world's second-largest economy's property market.

Outlook for the Rest of 2026

The Savills India report forecast investment momentum to remain 'firm but measured' through the remainder of 2026, with offices, prime logistics, and AI-related sectors continuing to anchor investor interest as pricing expectations stabilise. The trajectory will likely depend on the pace of interest rate normalisation in developed markets and the durability of occupier demand in India and Southeast Asia.