Savills Research recently released its global outlook report for 2025, revealing that the real estate market in the Asia Pacific (Apac) region continues to outperform its global counterparts. According to the report, Apac’s real GDP growth has exceeded that of the United States and Europe, indicating a strong and stable economic outlook.
Paul Tostevin, Savills’ head of world research, stated that there is more stability and confidence in the economic outlook than there has been in the past five years. This could result in increased investment and activity within the region, putting markets on a firmer footing.
In the first three quarters of 2024, Apac saw a 4% year-on-year growth in investment volumes, reaching a total of US$108.7 billion. Among the top-performing markets were Singapore (with a 74% growth), South Korea (71%), and Australia (63%).
Savills Research predicts that global real estate investment turnover will rise by 27% to US$952 billion in 2025, and by 2026, it is expected to surpass the US$1 trillion mark for the first time since 2022.
Alan Cheong, Savills Singapore’s executive director of research and consultancy, noted that Singapore’s real estate market is expected to follow the global trend. Meanwhile, Simon Smith, Savills’ regional head of research and consultancy for Apac, stated that the region is expected to experience a full investment recovery next year, driven by sectors such as tourism, living, and industrial (specifically logistics and data centres).
Smith added that Apac’s long-term structural trends, such as growth in markets like India and Southeast Asia, should also support real estate values. He emphasized the importance of how global themes play out in the region and which markets are best positioned to take advantage of them, as this will determine the winners and losers in the industry.
The report also highlighted that the office sector remains an attractive investment option in Apac, accounting for 37% of the region’s total real estate investment in the first three quarters of 2024 – significantly higher than the global average of 23%. Singapore, China, South Korea, and Japan were the top cities in the region for office utilization, with occupancy rates exceeding 90%. Furthermore, Apac continues to lead in green-certified office spaces, as occupiers place more emphasis on environmental, social, and governance (ESG) matters.
In Singapore, office tenants are increasingly prioritizing the green agenda, and there has been a slight recovery in activity levels, with more leases being concluded. As a result, rental rates for CBD Grade-A spaces are expected to hold firm from 2025 through 2026. Additionally, Singapore’s status as a hub and gateway to the region makes it a popular destination for new overseas brands, leading to healthy demand for prime retail developments and keeping rental levels stable.
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The industrial sector in Apac has also seen strong demand in key areas such as logistics, advanced manufacturing, healthcare, and data centres, which have helped stabilize rental rates and capital values in the long term. Cheong noted that there has been an increase in the construction of data centres in Singapore as more companies adopt AI and use the city-state as a base to search for suitable locations to build infrastructure.
Tostevin added that as global investment and activity continue to grow, the real estate industry must adapt to changing legislative landscapes and geopolitical dynamics while ensuring sustainable and socially responsible development to meet the evolving needs of the world. According to a UBS report, Apac is poised to be the top investment destination for family offices globally, solidifying its position as a top-performing region in the real estate market.