In its global outlook report for 2025, released on Nov 28, Savills Research states that Asia Pacific’s real estate market has continued to outperform its global peers, with real GDP growth surpassing that of the US and Europe.
According to Paul Tostevin, Savills’ head of world research, there is more stability and conviction in the economic outlook for the first time in five years. This is expected to boost investment and activity in the market.
In the first three quarters of 2024, Apac saw a 4% year-on-year growth in investment volumes, reaching US$108.7 billion. The three markets that saw the most significant increase in investment volumes over this period were Singapore (74% growth), South Korea (71%), and Australia (63%).
Savills Research predicts that global real estate investment turnover will increase by 27% to US$952 billion in 2025, and by 2026, it is expected to surpass US$1 trillion for the first time since 2022.
Alan Cheong, executive director of research & consultancy at Savills Singapore, states that Singapore’s real estate market is expected to follow the global trend.
Furthermore, Savills predicts that Apac will experience a full recovery in real estate investment next year, driven by sectors such as tourism, living, and industrial, specifically logistics and data centres.
Simon Smith, Savills’ regional head of research & consultancy, Apac, says that the region’s long-term structural trends should also support values in growth markets like India and Southeast Asia. However, the winners and losers will depend on how global themes play out in the region and who is best positioned to take advantage of them.
The office sector remains a significant investment attraction in Apac, commanding 37% of the total regional real estate investment in the first three quarters of 2024, which is significantly higher than the global average of 23%. Singapore, China, South Korea, and Japan are the top cities in the region for office utilisation, with occupancy rates of over 90%. Apac also remains a strong market for green-certified office spaces, as office occupiers place more emphasis on environmental, social, and governance (ESG) matters.
In Singapore, tenants are increasingly prioritizing the green agenda, and there has been a slight recovery in activity levels, with more leases being concluded. CBD Grade-A space rental is expected to hold firm from 2025 to 2026. As a hub and gateway to the region, Singapore is a preferred destination for new overseas brands, and prime retail developments continue to have strong demand, keeping rental levels stable.
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In the industrial sector, the demand remains robust in key sectors like logistics, advanced manufacturing, healthcare, and data centres, which is expected to stabilize rental rates and capital values in the long term. Cheong also adds that the increasing adoption of AI is leading to more data centres being built in Singapore, and more data centre service providers are using the city-state as a base to search for sites to build the infrastructure.
Lastly, Tostevin emphasizes that as global investment and activity return to more sustained growth, the real estate industry must adapt to evolving legislative landscapes and geopolitical dynamics while ensuring sustainable and socially responsible development to meet the changing world’s needs. In 2025, Apac is poised to continue being a top investment destination for family offices globally, according to UBS’s report.