Constrained supply creates focused opportunities in Tokyo, Singapore and other Apac real estate markets: Hines

Selected real estate markets across Asia Pacific (Apac), including Tokyo, Singapore, Seoul and Sydney, are offering compelling investment opportunities as supply constraints reshape the global economy, according to research by Hines.

In its 2026 mid-year outlook published in July, the US-headquartered real estate investment manager highlighted that drivers such as advances in AI, rising power needs, evolving supply chains and changing demographics have steadily increased demand for land, infrastructure, power, materials and development capacity.

However, new supply has become increasingly difficult to deliver, amid labour shortages, rising costs and other structural obstacles. This has resulted in “scarcity advantage” in selected real estate markets across developed Asia, where long-term demand, coupled with structural supply constraints, are supporting stronger pricing power and rental growth over time, says Hines.

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Standout performer: Tokyo

In its report, Hines assesses opportunities across global real estate sectors using its Leasing Environment Health Score (LEHS), a composite measure of market fundamentals comprising vacancy, and rent and demand growth. Scores ranged from 0 to 100, with higher scores indicating stronger leasing conditions relative to a market’s own history.

In Apac, Tokyo emerged as a standout performer, with its office sector scoring 88 — the highest globally. The Tokyo office market remains one of the strongest around the world, supported by tight supply and strong rental growth, says Hines.

Tokyo’s industrial sector also had a high score: 91. This comes as the market rides a recovery from a brief period of overbuilding. Over the past year, vacancy rates have declined from record peaks, while rental growth has accelerated.

Meanwhile, Tokyo’s residential market had an LEHS of 89, supported by resilient household demand, strong wage growth and tight supply, even as high occupancy leaves less room for further absorption.

Retail property opportunities in Singapore and Sydney

Hines’ report also highlights opportunities in Singapore and Australia’s retail real estate sectors. “Defensive retail in Singapore and grocery-anchored retail in Australia continue to show resilience, supported by strengthening fundamentals, population growth and limited new supply,” the company says.

While the Singapore retail sector had an LEHS of 24 due to softened demand for the past year, Hines notes that vacancy remained low at less than 2%. Limited new construction and below-trend rents should support growth moving forward, it adds.

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In Australia, strong demographics and negligible new supply have helped propel the retail property sector, with the average LEHS rebounding from a pandemic low of 8 to 58 as of 1Q2026 — the highest since 2010.

For Hines, Sydney stands out among the various Australian retail submarkets. “Sydney regional shopping centres remain our preferred subsector, supported by accelerating rental growth,” the report states.

Seoul’s living sector momentum

In South Korea, opportunities are arising in Seoul’s residential property market, amid a structural shift in the rental housing sector.

The city is moving away from a traditional jeonse system, which relies on lump-sum deposits, to monthly rents — a shift Hines believes will support leasing demand. Additionally, limited rental housing supply, a rise in single-person households and high housing purchase costs are expected to continue supporting rental growth.

The picture is more mixed elsewhere in Seoul’s market. The office sector has softened after a strong run, with four consecutive quarters of negative net absorption, even as prime submarkets like Gangnam have outperformed on limited supply. Industrial property demand also remains muted, with warehouse vacancy rates still in the mid-teens due to a previous supply wave.

Selectivity over broader bets

For David Steinbach, global chief investment officer at Hines, investment opportunities have become increasingly concentrated in markets where long-term demand remains durable, but future supply is difficult to deliver. “Across Apac, broad regional trends have become less important than local market dynamics,” he adds.

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Against this backdrop, investors stand to benefit from recognising markets where demand is reinforced by “meaningful barriers to future supply”, observes Ng Chiang Ling, global co-head of investment management at Hines. “While demand identifies where opportunities may emerge, it is the ability of supply to respond that often determines the durability of returns,” she says.

Joshua Scoville, Hines’ global head of research, notes that investors should remain selective and avoid broad risk-taking. Instead, they should focus on specific opportunities where pricing, capital structure and long-term demand drivers are aligned. “That means leaning into assets and markets where fundamentals are supported by scarcity, income durability, operational upside or long-term structural demand,” he explains.