Asia Pacific Office Sector Tops Investor Preference for First Time Since 2020, Displacing Logistics

While Western markets continue to grapple with half-empty downtowns and distressed commercial assets, the prevailing assumption is that the traditional office is in global decline. The Asia Pacific region, however, is quietly scripting a very different real estate narrative. Across the region, institutional capital is pouring back into the central business district, proving that the pandemic-era retreat from physical workspaces was a regional phenomenon rather than a permanent global shift.[1][5]

For the first time since 2020, office assets have overtaken industrial and logistics properties as the most preferred sector for commercial real estate investment in the APAC region. The shift marks the conclusion of a six-year run where warehouses and distribution centers dominated institutional portfolios, driven by the global e-commerce boom and supply chain realignments.[1][4]

According to CBRE's 2026 Asia Pacific Investor Intentions Survey, 25 percent of investors are now explicitly targeting the office sector, edging out the 21 percent who continue to prioritize logistics. Overall investment sentiment has rebounded sharply, with net buying intentions surging to 17 percent, up from just 5 percent in 2024.[1][4]

This renewed investor confidence is already translating into hard capital and signed leases. During the first half of 2026, office leasing across 11 key Asia Pacific markets rose 3 percent year-on-year to reach 49.5 million square feet.[2][3]

The recovery is highly concentrated, with India, Mainland China, and Japan anchoring the resurgence. Together, these three markets collectively accounted for more than 95 percent of the region's total leasing demand in the first half of the year.[2][6]

India has emerged as the undisputed engine of this growth, single-handedly contributing over 70 percent of the total office leasing volume. This dominance is heavily driven by the rapid expansion of global capability centers and a strong domestic corporate footprint that continues to absorb millions of square feet of new supply.[2][6]

For corporate occupiers and local business owners in the region, the physical office is no longer viewed merely as a place to put desks; it has evolved into a strategic tool for talent retention, collaboration, and productivity. For a company executive deciding on their next lease, the calculus has changed: demand is heavily skewed toward Grade A, future-ready workplaces that offer premium amenities, leaving older, unrenovated buildings struggling to attract tenants.[2][5]

To meet this specific demand, investors and local landlords are pivoting toward core-plus and value-add strategies. Rather than pursuing ground-up development amid elevated construction costs, funds are acquiring well-located but aging assets and retrofitting them to meet strict new environmental, social, and governance standards. For a property owner, upgrading HVAC systems and adding wellness facilities is now the baseline requirement to command top-tier rents.[1][4]

Meanwhile, the logistics sector is beginning to cool from its historic highs. With a sharp decline in new warehouse completions expected from 2027 onward and structural e-commerce growth stabilizing, investors are taking a more selective, income-focused approach to industrial assets.[1][4]

The broader macroeconomic picture is also providing a vital tailwind for the office sector. With interest rates stabilizing and inflation moderating across much of the region, the cost of debt is easing, allowing well-capitalized real estate investment trusts and private equity funds to deploy capital with greater conviction.[1][4]

As the second half of 2026 unfolds, the decoupling of APAC office markets from their Western counterparts appears nearly complete. For local buyers and global funds alike, the Asian office has successfully reclaimed its position as the cornerstone of a resilient, income-generating portfolio.[3][5]