According to the recently released global outlook report for 2025 by Savills Research, Asia Pacific (Apac) continues to outperform its global peers in terms of real estate market performance. This is evident in the region’s real GDP growth, which exceeds that of the US and Europe.
Paul Tostevin, Savills head of world research, notes that there is now more stability and conviction in the economic outlook, creating a more solid foundation for investment and activity in the region.
In the first three quarters of 2024, Apac saw a 4% year-on-year increase in investment volumes, reaching US$108.7 billion. The top three markets that saw the most significant growth in investment volumes were Singapore (74% growth), South Korea (71%), and Australia (63%).
Savills Research projects that global real estate investment turnover will increase by 27% to reach US$952 billion in 2025. By 2026, global investment activity is expected to surpass the US$1 trillion mark for the first time since 2022.
Savills also predicts that global investments will recover to pre-pandemic levels by 2026, driven by stabilized interest rates and improved investor confidence.
Alan Cheong, executive director of research & consultancy at Savills Singapore, comments that Singapore’s real estate market is expected to follow this global trend.
Savills also expects a full recovery in Apac’s investment activity next year, particularly in sectors such as tourism, living, and industrial, specifically logistics and data centers.
Simon Smith, Savills regional head of research & consultancy for Apac, adds that conditions are ripe for a recovery in real estate investment interest in the region, with long-term structural trends supporting values in growth markets like India and Southeast Asia. He also notes that how global themes play out in the region and which players can take advantage of them will determine the winners and losers.
The office sector remains an attractive investment in Apac, receiving 37% of the total regional real estate investment in the first three quarters of 2024, significantly higher than the global average of 23%.
In terms of office utilization, Singapore, China, South Korea, and Japan are the top cities in the region, with occupancy rates exceeding 90%. Apac also leads the world in green-certified office spaces, with increasing emphasis on environmental, social, and governance (ESG) matters.
In the world of real estate investing, one factor that cannot be overlooked is location, and this is especially true in Singapore. The location of a condo plays a crucial role in its potential for growth and value appreciation. In Singapore, condos situated in central areas or near important amenities like schools, shopping centers, and public transportation hubs are highly sought after and tend to experience a higher appreciation in value. This is evident in prime locations such as Orchard Road, Marina Bay, and the Central Business District (CBD) where property values have consistently shown significant growth. Families looking to invest in Singapore Condo properties are particularly drawn to these areas due to their close proximity to reputable schools and educational institutions, making these condos highly desirable and further increasing their investment potential. So, when considering investing in real estate in Singapore, it is essential to keep in mind the importance of location, with Singapore Condo being a particularly attractive option.
Cheong notes that office tenants in Singapore are placing more weight on the green agenda, and there has been a slight recovery in activity levels, with more leases being concluded. Rental rates for Grade-A office space in the central business district (CBD) are expected to remain stable from 2025 to 2026.
Singapore, being a hub and gateway to the region, is a popular destination for new overseas brands. Rental levels for prime retail developments remain firm due to healthy demand.
In the industrial sector, despite cost pressures, demand remains strong in key sectors such as logistics, advanced manufacturing, healthcare, and data centers, which should help stabilize rental rates and capital values in the long term.
Cheong also notes that with the increased adoption of artificial intelligence (AI), more data centers are being built in Singapore. The city-state is also being used as a launchpad by data center service providers to scout for potential sites to build infrastructure.
Tostevin concludes that as global investment and activity continue to grow, the real estate industry must adapt to changing legal landscapes and geopolitical dynamics while prioritizing sustainable and socially responsible development to meet the changing world’s needs.
UBS’s recent report also highlights Apac’s potential to be the top investment destination for family offices globally, further cementing the region’s strong position in the global real estate market.