Savills Research has released its global outlook report for 2025, and it reveals that the Asia Pacific (Apac) real estate market continues to surpass its global counterparts. According to the report, Apac’s real GDP growth is outstripping that of the US and Europe, suggesting a stable and confident economic outlook. This will likely lead to increased investment and activity in the region.
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 that saw significant year-on-year growth were Singapore (74%), South Korea (71%), and Australia (63%). This trend is expected to continue, with Savills forecasting global real estate investment turnover to rise by 27% to US$952 billion in 2025.
The report also notes that global investments are expected to reach pre-pandemic levels by 2026, thanks to stabilized interest rates and improved investor confidence. In line with this, Singapore’s real estate market is set to follow suit and reflect this global trend, says Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore.
Apac is expected to see a full recovery in real estate investments next year, driven by sectors such as tourism, living, and industrial development, particularly in logistics and data centers. Simon Smith, Savills regional head of research & consultancy for Apac, notes that the region’s stable economic conditions and long-term structural trends should support values in growth markets such as India and Southeast Asia. However, the winners and losers will be determined by how global themes play out in the region and which countries are best positioned to take advantage of them.
In the Apac region, the office sector remains the most attractive, accounting for 37% of 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 are the top cities for office utilization, with occupancy rates exceeding 90%. The region also has a strong focus on green-certified office spaces, with tenants placing importance on environmental, social, and governance (ESG) matters.
Singapore, being a hub and gateway to the region, is a popular choice for new overseas brands. Prime retail developments are seeing healthy demand, which is keeping rental levels stable. In the industrial sector, despite cost pressures, there is a strong demand for logistics, advanced manufacturing, healthcare, and data centers, which will help maintain steady rental rates and capital values in the long term.
Cheong also notes that Singapore is seeing an increase in data centers being built, thanks to greater adoption of artificial intelligence and more data center service providers using the city-state as a launchpad for expansion.
When it comes to investing in a condominium, financing becomes a crucial consideration. In Singapore, there are various mortgage options available; however, it is crucial to take note of the Total Debt Servicing Ratio (TDSR) framework. This framework sets a limit on the amount of loan a borrower can take based on their income and current debt obligations. To make wise decisions about financing, it is important to have a good understanding of the TDSR and seek guidance from financial advisors or mortgage brokers. This will help investors avoid over-leveraging and make informed choices. Additionally, keeping an eye on new condo launches can also provide potential opportunities for favorable financing options.
As global investment and activity continue to grow, the real estate industry needs to adapt to changing legislative landscapes and geopolitical dynamics, while also focusing on sustainable and socially responsible development to meet the needs of a evolving world, says Savills’ head of world research, Paul Tostevin.
In conclusion, UBS’s report predicts that Apac will become the top investment destination for family offices globally, further cementing the region’s position as an attractive and stable market for real estate investment.