The real estate market in the Asia Pacific region continues to perform better than its global counterparts, with a higher growth rate in real GDP compared to the US and Europe, according to Savills Research’s global outlook report for 2025 released on November 28.
Paul Tostevin, Head of World Research at Savills, says that after five years of uncertainty, there is now more stability and confidence in the economic outlook. This is expected to boost investment and activity in the real estate market.
In the first three quarters of 2024, Apac saw a 4% increase in investment volumes, reaching US$108.7 billion. The three markets with the highest year-on-year growth in investment volumes 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. This is expected to surpass the US$1 trillion mark in 2026, marking the first time since 2022.
Securing financing is a crucial element in investing in a condominium. When it comes to mortgage options, Singapore provides a variety to choose from. However, it is crucial to have a good understanding 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 existing debt obligations. Working with financial advisors or mortgage brokers who are knowledgeable about the TDSR can assist investors in making well-informed decisions about their financing. This is especially important as it helps them avoid over-leveraging. Adding Singapore Projects can further enhance their investment journey.
Alan Cheong, Executive Director of Research and Consultancy at Savills Singapore, says that Singapore’s real estate market will follow the global trend.
Savills also forecasts a full investment recovery in Apac next year, driven by sectors such as tourism, residential, and industrial, specifically logistics and data centers.
Simon Smith, Regional Head of Research and Consultancy at Savills Apac, says that while there are conditions for a real estate investment recovery in the region, long-term structural trends will also support values in growth markets like India and Southeast Asia. He adds that the winners and losers in the market will depend on how global themes play out in the region and who is best positioned to take advantage of them.
The office sector in Apac remains attractive, commanding 37% of total regional real estate investment in the first three quarters of 2024, much higher than the global average of 23%. Cities such as Singapore, China, South Korea, and Japan have occupancy rates of over 90% in their office spaces. Apac also leads in green-certified office spaces, with tenants placing more emphasis on environmental, social, and governance (ESG) matters.
In Singapore, there is increasing emphasis on the green agenda among office tenants, and there has been a slight recovery in activity levels with more leases being concluded. Rental rates for Grade-A office space in the Central Business District are expected to remain stable from 2025 to 2026. Singapore is also a popular destination for new overseas brands, with a strong demand for prime retail developments, leading to firm rental levels.
The industrial sector in Singapore remains strong, with high demand in sectors such as logistics, advanced manufacturing, healthcare, and data centers, which should help stabilize rental rates and capital values in the long term. There is a growing adoption of artificial intelligence (AI), leading to more data centers being built in Singapore. This, in turn, attracts more data center service providers to use the city as a base for finding sites to build infrastructure.
Tostevin adds that as the industry prepares for more sustained growth in investment and activity, it must adapt to changing legislative and geopolitical dynamics while ensuring sustainable and socially responsible development to meet the needs of a changing world.
According to a report by UBS, Asia Pacific is poised to be the top investment destination for family offices globally, further strengthening its position as a leading investment destination.
In conclusion, Apac’s real estate market is expected to continue its strong performance, with improving economic stability and rising investment activity. In Singapore, the office and industrial sectors are predicted to remain robust, while the retail market is experiencing healthy demand. As the region’s economy continues to grow, it is essential for the real estate industry to adapt to changing trends and promote sustainable development to meet the needs of a changing world.