Savills Research’s global outlook report for 2025 reveals that Asia Pacific’s (Apac’s) real estate market continues to outperform its global counterparts, with a real GDP growth that exceeds that of the US and Europe. This is a significant development, as for the first time in five years, there is more stability and conviction in the economic outlook.
According to Paul Tostevin, Savills head of world research, this increased confidence will provide a firmer footing for markets, leading to higher investment and activity. In the first three quarters of 2024, Apac recorded a 4% year-on-year increase in investment volumes to US$108.7 billion. The three markets that saw the highest growth in investment volumes during this period were Singapore (74%), 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. By 2026, global investment activity is expected to surpass the US$1 trillion mark for the first time since 2022. This outlook is driven by a stabilisation in interest rates and improved investor confidence.
Alan Cheong, executive director of research & consultancy at Savills Singapore, expects Singapore’s real estate market to follow the global trend. Meanwhile, for Apac, Savills forecasts a full recovery in investment activity next year, primarily led by the tourism, living, and industrial sectors, particularly logistics and data centres.
Simon Smith, Savills regional head of research & consultancy for Apac, believes that longer-term structural trends, in addition to improving investment interest, will support values in growth markets such as India and Southeast Asia. The winners and losers in the region will ultimately be determined by how global themes play out and which countries are best positioned to take advantage of them.
Savills notes that Apac’s office sector remains highly 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%. Top cities in the region for office utilisation are Singapore, China, South Korea, and Japan, with occupancy rates exceeding 90%. Moreover, Apac continues to be a stronghold for green-certified office spaces, as office occupiers place more emphasis on environmental, social, and governance (ESG) matters.
In Singapore, there has been an increasing focus on the green agenda among office tenants. Activity levels have also shown signs of recovery, with more leases being concluded. Furthermore, rental rates for Grade-A office space in the Central Business District (CBD) are expected to remain stable from 2025 to 2026. As a hub and gateway to the region, Singapore continues to attract new overseas brands, resulting in strong demand for prime retail developments and keeping rental levels firm.
In the industrial sector, demand remains robust in key sectors like logistics, advanced manufacturing, healthcare, and data centres, despite cost pressures. This is expected to stabilise rental rates and capital values in the long term. Cheong also notes that the increasing adoption of artificial intelligence (AI) has led to more data centres being built in Singapore, with the city-state serving as a hub for data centre service providers to expand their infrastructure.
Tostevin adds that as global investment and activity returns to sustained growth, the real estate industry must adapt to evolving legislative landscapes and geopolitical dynamics, while also ensuring sustainable and socially responsible development to meet the changing needs of the world.
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Investing in real estate is a strategic decision, and the location plays a vital role in its success. In the context of Singapore, this becomes all the more significant. Condominiums situated in prime locations or in close proximity to essential amenities like schools, shopping centers, and public transportation hubs are more likely to appreciate in value. Areas like Orchard Road, Marina Bay, and the Central Business District (CBD) are considered top locations, with a consistent track record of property value growth. This is why investing in properties in these areas is highly recommended by experts. Moreover, the presence of reputable schools and educational institutions further adds to the appeal of these condominiums, making them a lucrative investment option for families. With the addition of Singapore Projects, the value of these properties is expected to soar even higher, making them a prime choice for investors.
According to a UBS report, Apac is set to become the top investment destination for family offices globally, highlighting the region’s growing appeal as a prime location for real estate investments. With its strong economic growth, stable markets, and increasing emphasis on ESG matters, Apac is poised to remain a top-performing region in the global real estate market.