Sydney Ranks as a Top Target for Asia Pacific Cross-Border Real Estate Investment in 2025 Amid Improved Sentiment: CBRE Survey

Sydney has ranked 2^nd behind Tokyo as a target for cross-border real estate investment in Asia Pacific as buying intentions rise according to CBRE’s 2025 Asia Pacific Investor Intentions Survey.

Asset repricing and the potential for decreasing debt costs is helping to drive interest in Sydney opportunities, with investors taking a selective view on other Australian markets such as Melbourne (ranking 7th) and Brisbane. Investors are set to place a particular emphasis on core assets, which are expected to experience the strongest capital growth.

Overall investment sentiment in Asia Pacific has improved, with net buying intention rising from 5% in 2024 to 13% in 2025. Key drivers of this increase include falling debt costs and asset repricing. Australian and Korean landlords have also demonstrated the most significant increase in their net buying intentions, driven by attractive pricing opportunities in their domestic markets.

“Even though expectations for significant rate cuts have tempered due to persistent inflation, we still expect investment activity to accelerate in 2025 as they start to take effect across the region,” said Greg Hyland, Head of Capital Markets, Asia Pacific for CBRE. “REITs, institutional investors, and funds are driving this momentum, with many focusing on core-plus and value-add opportunities to achieve higher returns. In some cases, this could be acquiring core assets that have undergone repricing.”

Industrial properties remain the most sought-after asset class for investors in Asia Pacific, particularly among core investors. Meanwhile, office and data centre assets are seeing increased interest in 2025, with investors targeting core-plus and value-add properties in the office sector and opportunistic pricing for data centres, particularly in Southeast Asia.

“The logistics and office sectors continue to dominate investor preferences for 2025,” said Ada Choi, Head of Research, Asia Pacific for CBRE. “Investors are maintaining their focus on logistics assets in Japan and Australia, with emerging interest in India. At the same time, the office sector is experiencing increased interest after three years of declining investor preference, particularly in markets like Australia, Singapore, and Korea, where leasing activity has stabilised or is showing growth.”

The survey, conducted in November and December 2024, revealed the following insights:

Key Survey Highlights

• Over 40% of investors identify geopolitical concerns as the biggest challenge for real estate investment, citing uncertainties related to potential tariffs and U.S. fiscal policies.
• Healthcare-related properties, such as life sciences and medical offices, are most preferred alternative asset type for investment, followed by data centres, student accommodation and retirement living.
• Approximately 56% of investors plan to prioritise acquiring or developing green buildings as their top sustainability initiative, surpassing retrofitting existing buildings.
• 35% of investors aim to increase renewable energy generation, particularly in the industrial and living sectors.