Japanese capital looking to Australia, particularly Brisbane

Knight Frank’s recently-released Australian Capital View – August 2025 found one of the key themes for Capital Markets in 2025 was Japanese investors continuing to target Australian assets.

The report found cross-border investors have been the most active in Australia’s commercial market, accounting for 42% of total acquisitions in Q2, or $2.6 billion in transactions, bringing the total volume for the first half of 2025 to $4.1 billion, or 30% of activity.

Offshore demand was dominated by US investors, which accounted for 52% of cross-border investment, with demand from Singapore, Japan and Canada relatively subdued.

However, Knight Frank’s Australian Capital View – August 2025 found that after sitting on the sideline in recent quarters, the appetite of Japanese capital for Australian assets appears to be re-emerging.

“Japan’s rapidly shrinking population is limiting the prospects for income and land value growth in the domestic market, so investors are focussed on diversifying their portfolios globally and view Australia as particularly attractive,” said Knight Frank Chief Economist Ben Burston.

“There is a sense of urgency to take steps to deploy capital in faster growing economies, partly due to 2023 Tokyo Stock Exchange reforms that have placed more pressure on corporates to generate better returns.”

Knight Frank Partner, Head of Capital Markets Queensland Justin Bond said Brisbane was seeing an influx of Japanese capital looking to buy in Brisbane across several commercial real estate sectors, including office, retail and industrial, with living sectors, including build-to-rent projects, also on the radar.

“Brisbane seems to be higher on their list than Melbourne at the moment,” he said.

“Our city has excellent growth prospects, with one of the strongest office leasing markets in the country, as well as solid population growth, and of course the upcoming Olympics in 2032, which will see major public and private infrastructure spending in Brisbane.

“Many of these Japanese investor groups are looking to buy a stake in an existing asset and partner with local managers.

“Their investment horizon is circa five years, and they are generally looking for core plus opportunities.

“Well-located CBD properties with good amenity and public transport are the most sought after, and they are looking to deploy capital from $10 million up to $200 million.”

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