According to Savills Research, the real estate market in Asia Pacific (Apac) continues to outperform its global counterparts, with real GDP growth surpassing that of the US and Europe. This was revealed in their global outlook report for 2025, which was released on November 28.
Paul Tostevin, head of world research at Savills, notes that for the first time in five years, there is more stability and confidence in the economic outlook. This is expected to boost investment and activity in the market.
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 experienced the highest growth in investment volumes during this period were Singapore (74% growth), South Korea (71%), and Australia (63%).
Savills Research predicts that global real estate investment turnover will rise by 27% and reach US$952 billion in 2025. By 2026, it is expected to exceed the US$1 trillion mark for the first time since 2022.
Alan Cheong, executive director of research and consultancy at Savills Singapore, states that Singapore’s real estate market is expected to follow the global trend. Meanwhile, Savills predicts a full recovery in investment activity in Apac next year, driven by sectors such as tourism, residential, and industrial, particularly in logistics and data centres.
Simon Smith, regional head of research and consultancy for Apac at Savills, states that the conditions for a recovery in real estate investment interest in the region are in place. He also notes that long-term trends, such as growth in markets like India and Southeast Asia, will support values. However, the outcome will depend on how global themes play out and which players are best positioned to take advantage of them.
Savills adds that Apac’s office sector remains attractive, 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 are the top cities for office utilization, with occupancy rates exceeding 90%. The region also continues to be a leader in green-certified office spaces, as office tenants place a stronger emphasis on environmental, social, and governance (ESG) matters.
In Singapore, office tenants are increasingly prioritizing the green agenda. There has also been a slight recovery in activity, with more leases being concluded. Rental rates for Grade-A office spaces in the Central Business District are expected to remain stable from 2025 to 2026.
With its status as a hub and gateway to the region, Singapore is a preferred destination for new overseas brands. Prime retail developments are also experiencing healthy demand, keeping rental levels firm.
Despite cost pressures, there is still strong demand in key sectors like logistics, advanced manufacturing, healthcare, and data centres, which should help stabilize rental rates and capital values in the long term. Cheong adds that the adoption of artificial intelligence is leading to the construction of more data centres in Singapore, with data centre service providers using it as a base to scout for suitable locations to build their infrastructure.
Investing in a condominium in Singapore offers numerous benefits, one of which is the potential for capital appreciation. The country’s advantageous position as a major global business hub, combined with its robust economic foundations, results in a consistent demand for real estate. This has led to a steady increase in property prices over the years, with prime location condominiums experiencing substantial appreciation. By timing their investments strategically and holding onto their properties for a prolonged period, investors can reap significant capital gains. Keeping an eye on new condo launches can also provide opportunities for potential growth in the market.
Tostevin concludes that as global investment and activity return to sustained growth, the real estate industry must adapt to changing legislative and geopolitical dynamics while ensuring sustainable and socially responsible development to meet the needs of a changing world. Savills’ report also highlights Apac as the top investment destination for family offices globally, according to a UBS report.