PETALING JAYA: Private capital, including high net worth individual (HNWI) investors and family offices, continues to dominate the global commercial real estate (CRE) market.
With US$464 billion (RM1.8 trillion) invested in 2025, it outpaced institutional investors (US$347 billion) for the fourth year running, according to Knight Frank’s The Wealth Report.
This included US$139.1 billion in cross-border CRE investments across 10 key markets, including the United Kingdom, the United States and Germany. The Asia-Pacific region saw a return to 2019 levels of cross-border HNWI investment, driven by pricing resets and a shift in investor behaviour.
“Global CRE was clearly entering a new phase of the cycle where repricing, supply and demand fundamentals, stabilising interest rates and improving visibility on income was bringing capital back into the market. Recent global events have undoubtedly created uncertainty, but the trajectory driven by the fundamentals will resume,” said Knight Frank capital markets global head, Nick Braybrook.
These global trends are reflected in Malaysia, which registered a record RM426.7 billion in approved investments in 2025, supported by the government’s ongoing emphasis on domestic investment. This included 86.7% year-on-year growth in private equity and venture capital investments, with the real estate sector alone registering investments worth RM78.2 billion.
Private capital, and family offices in particular, are emerging as a major growth catalyst for CRE in Malaysia. This included a number of significant family office transactions in 2025, further catalysed by the introduction of the single family office (SFO) framework in Johor’s Forest City Special Financial Zone.
“Malaysia’s CRE sector saw a number of high-profile private capital deals in 2025, including the RM1.1 billion acquisition of a major stake in the prestigious The Exchange TRX development by a family office. In addition, the Forest City SFO framework is a clear indicator of the government’s emphasis on single family offices as an investment vehicle for domestic and international high- net-worth families, with the programme securing nine family offices managing a combined US$169 million of assets as of end-2025, with a target of RM2 billion by end-2026,” said Knight Frank Malaysia group managing director Keith Ooi
The growing dominance of private capital in the real estate sector is attributed to its advantages in terms of faster decision-making, access to diverse capital streams, and higher tolerance of risk, relative to institutional investors. Private investors are also adapting their approach, with more HNWIs moving from one-off deals to strategic acquisitions undertaken through a private office framework, leading to the rise of the family office paradigm.
“We are seeing a significant rise in emerging market wealth. The number of family offices worldwide is projected to reach 10,000 this year, with an annual growth rate of 5%, while Malaysia’s UHNWI population is set to grow to 1,881 individuals by 2031. This, coupled with the ongoing tendency for regional banks to downplay CRE exposure, is driving private capital dominance in the space,” said Knight Frank Malaysia capital markets (investments) executive director, James Buckley.
First launched in 2007, The Wealth Report is the ultimate guide to prime property markets, global wealth distribution, the threats and opportunities for wealth, commercial property investment opportunities, philanthropy and luxury spending trends.
