Asia-Pacific’s commercial real estate sector saw a significant investment surge in Q3 2026, reaching $65.6b, marking a 17.9% increase from the previous quarter and a 7.3% rise year-on-year. This makes it the second-highest quarter on record, according to Knight Frank’s latest report. However, the momentum is being tested by rising borrowing costs, which are impacting liquidity and returns.
Retail investments led the growth, with a 54.3% year-on-year increase to $12.5 billion. Singapore played a pivotal role, with CapitaLand Integrated Commercial Trust’s $3.0b acquisition of Paragon on Orchard Road accounting for nearly a quarter of the regional retail investment. Australia also saw significant retail transactions, including Cbus Property’s $914.2m acquisition of stakes in Westfield Carindale and Lakeside Joondalup.
Daniel Dixon, Head of Capital Markets at Knight Frank Asia-Pacific, noted that whilst investment volumes began the year strongly, rising debt costs are now causing investors to adopt a more cautious approach. “We anticipate some transactions will be delayed or repriced,” he said, highlighting opportunities for well-capitalised investors.
Cross-border investments surged by 88.3% to $23.8b, with Japan, Singapore, and Australia being the primary destinations. Christine Li, Head of Research at Knight Frank, mentioned that cross-border investment in the first nine months has already surpassed the full-year 2025 total, indicating strong investor confidence.
Knight Frank forecasts a 15% to 20% growth in total Asia-Pacific investment volumes for 2026, driven by investors with the capital and conviction to act amidst adjusting valuations.
