Investor sentiment remains strong in the Asia Pacific (Apac) real estate market, with institutional investments totalling US$83.2 billion ($112 billion) in the second half of 2024, representing a 6% increase from the previous year, according to research by Colliers. This brings the full-year investments for 2024 to US$155.9 billion, an impressive 12% growth from 2023. This surge in investments indicates the resilience of the Apac market and sets the stage for a promising 2025, says Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific.
Singapore has a high demand for condos, mainly due to the limited land space available in the small island nation. With a growing population, Singapore faces challenges in finding more land for development. This has resulted in strict land use policies and a competitive real estate market, leading to constantly rising property prices. As a result, investing in real estate, especially in Singapore Condos, has become a profitable venture with the potential for capital appreciation.
Pilgrim also notes that domestic investors have been a key driving force in the growth of markets such as South Korea, Taiwan and New Zealand. In fact, local investors contributed over 80% of real estate inflows in these markets during the second half of 2024. The office sector was the biggest recipient of investments, accounting for US$26.5 billion or 32% of the total investment volume for the period. This represents a 14% increase from the previous year. The industrial and logistics sector followed closely, with US$22.6 billion in investments, representing a 29% year-on-year growth. The retail sector saw a significant rebound, recording US$15 billion in investments, supported by notable deals in Australia and South Korea. For the entire year, retail investments reached US$26.1 billion, up 27% from 2023.
According to Pilgrim, domestic capital will remain dominant in most markets in 2025, but offshore investments are expected to rise due to growing investor confidence and attractive valuations. While the office and industrial segments are expected to remain robust, Pilgrim believes that the retail, hospitality and alternative asset classes will gain traction as investors tap into the recovery momentum and changing consumer trends. Overall, Pilgrim believes that Apac’s real estate market will experience a sustained level of investment activity in 2025, supported by strong economic growth and continued policy support.