Asian investment into Australia reached a series of record-breaking milestones in 2025, with Japan, Korea, Singapore, and Malaysia reshaping bilateral economic ties through landmark deals and strategic capital deployment, even as global macroeconomic headwinds tested investor confidence across the region.
Key takeaways
- Japan’s M&A market surged 83.9% to US$218.5 billion in 2025, marking the third consecutive year of record Japanese investment into Australia.
- Korea’s POSCO sealed a landmark A$1.2 billion lithium deal while Hanwha cemented its defence presence through a 19.9% stake in Austal, signalling Asia’s deepening strategic ties with Australia.
- Critical minerals, defence, real estate, and renewables are set to dominate Asia-Pacific deal flow into Australia throughout 2026.
These are the central findings of MinterEllison’s 2026 Asia Report: Year in Review, the fifth annual edition of the firm’s flagship Asia practice publication tracking cross-border deal activity, regulatory shifts, and sector-by-sector investment trends across Australia’s key Asian partner economies.
Japan: Unprecedented M&A and Historic Leadership
Japan’s M&A market reached unprecedented levels in 2025, recording 3,472 transactions valued at a combined US$218.5 billion, an extraordinary 83.9% surge compared to 2024.
Sanae Takaichi became Japan’s first female Prime Minister, signalling a decisive pivot toward economic growth and a commitment to lifting defence spending to 2% of GDP.
Japanese investment in Australia reached record levels for the third consecutive year, with real estate, energy security, and data centres emerging as priority sectors. The landmark A$55 billion Mogami-class frigate contract further cemented defence collaboration as a key pillar of the bilateral relationship heading into 2026.
Korea: Lithium Billions and a Expanding Defence Presence
Korea delivered one of the year’s most consequential bilateral transactions. POSCO Holdings committed A$1.2 billion into Mineral Resources’ lithium assets, securing a 30% interest and long-term access to spodumene concentrate from Tier-1 assets at Wodgina and Mt Marion.
Meanwhile, Australia-Korea cross-border investment volumes grew 20% year-on-year in the first three quarters of 2025. On the defence front, Hanwha’s stake in Austal Limited was approved at 19.9%, positioning the Korean conglomerate as Austal’s largest single shareholder and reflecting deepening strategic industrial ties between the two nations.
China: Record Trade Surplus, Subdued M&A
China’s domestic economy showed signs of stabilisation in 2025, posting a record US$1.189 trillion trade surplus while accelerating overseas manufacturing investment across Southeast Asia.
Inbound M&A from Chinese companies into Australia remained subdued, as FIRB approval challenges continued to constrain deal activity.
Australia charted an independent China strategy under its re-elected government, prioritising trade while maintaining security commitments. MinterEllison anticipates 2026 deal flow will emerge primarily through minority equity interests, joint ventures, and licensing agreements in sectors including EVs, mining, biotech, and fintech.
Singapore and Malaysia: Capital, Infrastructure, and Renewables
Singapore delivered political certainty following Prime Minister Lawrence Wong’s landslide election victory, though overall M&A activity softened amid US-driven global headwinds.
Capital markets reform initiatives deployed approximately S$3.95 billion to local asset managers, while IPO fundraising reached its highest level since 2019 at S$2.54 billion. Australian real estate remains a key deployment target for Singapore-based capital in 2026.
Malaysia rounded out a strong year for Southeast Asian investment into Australia, backed by solid GDP growth of 4.7 to 5.0%. Sime Darby Property acquired the largest Melbourne CBD development site in five years, while Gamuda Berhad secured infrastructure contracts exceeding RM8 billion and entered Tasmania’s renewable energy market. Fortescue’s green hydrogen collaboration in Sarawak highlighted the growing maturity of bilateral clean energy ties.
The 2026 Asia Report presents a region demonstrating strategic purpose despite a volatile global backdrop. Critical minerals, defence, real estate, and renewables are expected to drive deal activity across all five markets in the year ahead, reinforcing Australia’s position as a preferred destination for Asian capital.
