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APAC REAL ESTATE INVESTORS ADJUST TO MORE ACTIVE,
SPECIALISED STRATEGIES: VISTRA-APREA SPONSORED
FEATURE
2025/09/29 BY PLATFORM SPONSOR — LEAVE A COMMENT
Real estate investors in Asia Pacific are adopting more active management strategies and venturing
into more specialised sectors to achieve a returns in a challenging environment, according to a
recent survey conducted by Vistra Fund Solutions and the Asia Pacific Real Assets Association
(APREA).
In a survey conducted in the second quarter, Vistra and APREA found that with interest rates coming
down and inflation looking tamed in more markets, commercial real estate investment can be
expected to increase by 5 to 10 percent in 2025, but with investors turning to new strategies and
sectors to drive returns.
Based on the findings of the survey, the authors have published the inaugural Vistra Fund Solutions
Friction Index, which examines the most favoured strategies being pursued by institutional real
estate investors in Asia Pacific, as well as the challenges which they are encountering in executing
on those strategies.
“This white paper provides a comprehensive analysis of APAC real asset market trends and
insights. The Vistra Fund Solutions Friction lndex is based on a survey conducted in conjunction with
APREA of senior real asset investors with offices in APAC. It provides a strategic framework to
understand both sentiment and the future direction of investment in various sectors and
geographies region-wide. In 2025, the real asset market has shown resilience, with multiple sectors
experiencing notable performance. Investors are increasingly drawn to high-potential opportunities
that often also come with significant friction including regulatory, tax, and operational challenges.
Strategic and proactive investors who can adeptly navigate these challenges are well-positioned to
capitalise on market upside.
With this report, we aim to provide valuable insights to help real asset investors understand and
navigate the intricacies of the current market and ultimately enable them to make informed
decisions that drive success”, said David Anderson, executive vice president for APAC at Vistra Fund
Solutions.
David Anderson, Executive Vice President, Fund Solutions, APAC, Vistra Fund Solutions
With the survey having gathered responses from more than 100 C-suite APREA members and Vistra
clients investing in real assets across Asia Pacific, the poll brought in information regarding 10
asset classes across 12 key markets in the region, providing insights into the challenges and
opportunities which players in the market are focused on this year.
Cautious Optimism Prevails
With the market still adjusting to the shift from an extended period of low interest rates, the survey
found that investors remain guarded about the near to medium-term outlook.
Regarding finding real asset investment opportunities in the region over the next one to two years,
39 percent of respondents gave a “neutral” response and 36 percent indicated that they are slightly
optimistic. Just 13 percent are highly optimistic while 12 percent said that they are slightly or highly
optimistic.
Value-Add and Opportunistic on the Rise
While core and core-plus strategies once were the most favoured approached to real estate
investment in Asia Pacific, the need to achieve yields in a higher interest rate environment, and new
concerns regarding risk have brought real estate credit, value-add and opportunistic strategies
nearly on par with core.
The survey results show core maintaining a lead of just a few percentage points over other
strategies, with 63 percent of respondents ranking the approach within their top three, among core,
real estate debt, opportunistic and value-add.
By comparison, 59 percent of respondents selected real estate debt among their top three, with 56
percent including opportunistic and both value-add and distressed asset strategies being included
by 53 percent of respondents.
The authors pointed to the growing popularity of value-add and opportunistic strategies as
illustrating the growing preference for higher yielding bets which require active management to
create value and take advantage of assets facing challenges.
Data Centres and Industrial Lead
Among asset classes, the report found investors showing a strong consensus in favour of logistics
and industrial as well as data centres, with strategies favouring these assets scoring points for
their upside potential. For logistics demand, Singapore saw the highest activity in the region,
leading Asia Pacific in both inquiries and site visits.
Next most favoured were rental residential assets, including multi-family and build-to-rent, in
addition infrastructure.
Trailing as options were traditional commercial mainstays office and retail, which ranked at the
bottom of investor preferences.
Market Friction Issues on the Rise
With investors moving into more active sectors, and with emerging market plays becoming more
common, the survey also highlighted challenges from the “friction” of investing as a dominant
theme in the industry. With investors facing regulatory hurdles, tax complexity, and operational
challenges in the region’s real estate markets, these barriers have become a primary concern.
Respondents pointed to frustrations from navigating complex and unclear regulatory environments,
political risk, a lack of transparency, and the difficulty in finding good deals as major hurdles to
achieving successful investments.
Among markets, India, China, Indonesia, and Vietnam were consistently highlighted as the most
challenging jurisdictions with regard to both tax regimes and for hiring and retaining operational
talent. Some 47 percent of respondents identified India as having a challenging tax regime, the
highest of any market.
Associated with the rising operational challenges facing investors, a strong majority of repondents
indicated a desire to outsource complex and resource-intensive functions of their business to
improve efficiency.
62 percent of respondents respondents said they prefer to outsource regulatory reporting, 59
percent pointed to tax and audit coordination as functions to be outsourced with an equal
percentage indicating that external management of their SPV is an area which they would prefer to
hand off to external experts.
“It’s clear that operational friction is slowing momentum across many APAC markets—especially
around regulation, partnerships, and tax complexity. When nearly half of respondents say
customising fund structures for multiple jurisdictions or accessing reliable performance data is
difficult, it’s a signal: scale and local expertise matter more than ever,” said Otto Von Domingo,
Managing Director and Head of Commercial for APAC at Vistra Fund Solutions.
Otto Von Domingo, Managing Director, Head of Commercial, APAC, Vistra Fund Solutions
Among the activities cited by respondents as creating significant operational friction were
customising fund structures for multiple jurisdictions, ensuring data security and reliability, and
navigating cross-border structuring. The respondents also pointed to regulatory ambiguity, political
uncertainty, and a lack of market transparency and standardisation as major operational pain
points.
AI and ESG Reshaping Operations
The newest force reshaping Asia Pacific’s real estate investment landscape appears to be artificial
intelligence with survey respondents seeing a role for the emerging technology in particular
aspects of the industry.
65 percent of respondents see AI having the greatest impact on deal sourcing and market
intelligence, with systems for improving operational efficiency ranking second at 55 percent,
pointing to a drive to use technology to gain a competitive edge and streamline processes.
ESG is also a major element of asset management operations, according to the survey, with 65
percent of respondents ranking ESG as “important” to “extremely important,” confirming its
integration into the investment decision-making process. However, 35 percent of those polled still
see ESG as only “slightly important.”
Friction Accompanies Opportunities
In reviewing the results of the Vistra Fund Solutions Friction Index 2025, the authors pointed to a
paradox defining APAC real asset investing in 2025 – that the most promising opportunities often
come with the highest levels of operational friction.
As investors move beyond passive strategies to more active approaches in pursuit of returns, and
often are venturing into less familiar markets such as Japan, China, India and Vietnam.
Given the tax complexity, regulatory opacity, and talent shortages which persist in these markets,
success more than ever depends on investors ability to execute and their ability to partner with
organisations with local, industry-specific expertise.
Streamlining reporting, embracing AI-driven tools, and outsourcing high-friction functions like
compliance, tax, and fund administration are seen as ways investors can free up teams to focus on
core functions and succeed in what remains a challenging environment.
Click here to download the full report.