Patience and a willingness to embrace complex situations will be important for Asia Pacific real estate investors in 2026, industry experts say. The 2026 Emerging Trends in Real Estate® Asia Pacific report was launched in Singapore last week and the results discussed by a panel of leading real estate professionals.

The panel featured (from left to right above) Stuart Porter, Tax Partner, PwC Japan, Julia Huang, Managing Director, Real Estate at Macquarie Asset Management, Yvonne Siew, Managing Director & Head, Product Development and Wealth Markets at CapitaLand, Yeo Kia Chiak, Managing Director and Deputy Head, Institutional Banking Group – Real Estate at DBS, Loh Hwee Long, CEO, Keppel DC REIT and Magdelene Chua, Partner at PwC, moderating.

The 2026 report, published jointly by ULI and PwC, found a mood of cautious optimism amongst real estate professionals, however they reported considerable disparities in markets and sectors across the region. Tokyo was ranked as the top city for investment in the Emerging Trends survey, top of the table for the third year running and followed by Singapore, Sydney, Osaka and Seoul. Investors and managers interviewed for the report expressed a strong preference for cities with stable economies, low vacancy in key sectors and market liquidity.

The panel was much in agreement with the report, noting that the mood of optimism in Asia Pacific real estate was fragile, hence the preference for developed markets and sectors with strong fundamentals. The panel also picked Melbourne and Fukuoka as other markets which could be set for strong performance, due to strong demographics and lower pricing than other major cities in Australia and Japan.

Construction cost inflation remains the top industry concern. This pushes investors toward stabilized, income-producing assets in familiar markets rather than development plays. The panel noted that construction costs for Japanese logistics development had doubled in the past three years. Power availability emerged as the critical constraint for the development of data centres, predicted to be the best performing sector in 2026 by Emerging Trends survey respondents.  However, panellists noted that markets with severe power constraints, including Singapore and Tokyo, paradoxically offer the best risk-adjusted returns for existing asset owners due to rental reversion potential.

The living sector garnered significant interest and panellist pointed to the importance of operational excellence and scale in these sectors, which was driving investors towards platform acquisitions. The panel emphasized that 2026 success requires operational expertise, local market knowledge, and patience. Investors willing to embrace complexity may find the most attractive returns.

READ REPORT