According to Savills Research’s global outlook report for 2025, the Asia Pacific (Apac) real estate market continues to outperform its global counterparts, with real GDP growth surpassing that of the US and Europe. This is a positive sign for the region, as it shows more stability and confidence in the economic outlook. Paul Tostevin, head of world research at Savills, believes that this will 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 top three markets with the most significant growth were Singapore (74%), 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 is expected to surpass the US$1 trillion mark in 2026. This would be the first time since 2022 that global investment activity has reached pre-pandemic levels. According to Alan Cheong, executive director of research & consultancy for Savills Singapore, the real estate market in Singapore is expected to follow this global trend. Meanwhile, Savills also forecasts a full investment recovery in Apac in 2026, driven by sectors such as tourism, living, and industrial, with a focus on logistics and data centers. Simon Smith, regional head of research & consultancy for Apac at Savills, believes that the region’s long-term structural trends, as well as how global themes play out, will determine the winners and losers in the market.
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The office sector in Apac remains attractive, accounting for 37% of the total regional real estate investment in the first three quarters of 2024 – significantly higher than the global average of 23%. Singapore, China, South Korea, and Japan are the top cities in the region for office utilization, with occupancy rates exceeding 90%. Apac also has a strong presence of green-certified office spaces, as office occupiers are placing more emphasis on environmental, social, and governance (ESG) matters. In Singapore, Cheong notes that office tenants are increasingly considering the green agenda when choosing their office space. With a recovery in activity levels and more leases being concluded, rental rates for CBD Grade-A spaces are expected to remain stable from 2025 to 2026. Singapore’s role as a hub and gateway to the region also makes it a popular destination for new overseas brands. Demand for prime retail developments remains healthy, keeping rental levels firm.
Despite cost pressures, the industrial sector in Apac remains strong, with high demand in sectors such as logistics, advanced manufacturing, healthcare, and data centers. Cheong believes that this will help stabilize rental rates and capital values in the long term. The increasing adoption of artificial intelligence has led to more data centers being built in Singapore, with the city-state serving as a base for data center service providers to search for suitable sites.
Tostevin stresses the importance of sustainable and socially responsible development in the real estate industry as global investment and activity returns to sustained growth. With evolving legislative landscapes and geopolitical dynamics, it is crucial for the industry to adapt and meet the changing needs of the world. Savills Research also reports that Asia Pacific is poised to be the top investment destination for family offices globally, according to a UBS report, further highlighting the region’s attractiveness for real estate investment.