Apac See Full Investment Recovery 2025 Singapores Market Parallel Global Narrative Savills
According to the global outlook report for 2025 released by Savills Research on Nov 28, Asia Pacific’s (Apac’s) real estate market continues to outshine its global counterparts with strong real GDP growth, surpassing that of the US and Europe. The report also highlights that for the first time in five years, there is more stability and confidence in the economic outlook, resulting in increased investment and activity in the region.
Savills head of world research, Paul Tostevin, comments that this stability will provide a more solid foundation for markets and lead to a boost in investment and activity. In the first three quarters of 2024, Apac saw a 4% year-on-year growth in investment volumes, reaching US$108.7 billion. The three markets that showed the most significant growth in investment volumes during this period were Singapore (74% growth), South Korea (71%), and Australia (63%).
Savills Research predicts a 27% increase in global real estate investment turnover to reach US$952 billion in 2025. By 2026, global investment activity is expected to exceed US$1 trillion 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 mirror this global trend.
The report also states that Apac’s real estate investment is expected to make a full recovery in 2025, driven by sectors such as tourism, living, and the industrial sector, particularly logistics and data centres. Simon Smith, regional head of research and consultancy for Savills Apac, adds that long-term structural trends and a rebound in interest in Asia Pacific should lead to growth in markets like India and Southeast Asia. Winners and losers in the region will be determined by how global themes play out and who can take advantage of them.
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In terms of the office sector, Apac remains a strong investment opportunity, accounting for 37% of the total regional real estate investment in the first three quarters of 2024. This is significantly higher than the global average of 23%. The top cities in the region for office utilization are Singapore, China, South Korea, and Japan, with occupancy rates exceeding 90%. Apac also leads in green-certified office spaces, as tenants place more emphasis on environmental, social, and governance (ESG) matters.
In Singapore, there is a growing focus on the green agenda among office tenants, and there has been a slight increase in activity levels, with more leases being concluded. CBD Grade-A space rental is expected to remain stable from 2025 to 2026. As a regional hub, Singapore remains a top destination for new overseas brands, driving demand for prime retail developments and keeping rental levels firm.
The industrial sector also shows strong demand in key sectors like logistics, advanced manufacturing, healthcare, and data centres, despite cost pressures. This is expected to maintain rental rates and capital values in the long term. Cheong notes that with the increasing adoption of AI, there is a rise in the construction of data centres in Singapore, with more data centre service providers using the country as a base to explore potential sites for development.
Tostevin emphasizes the importance of adapting to changing legislative and geopolitical dynamics and ensuring sustainable and socially responsible development in the face of a changing world as global investment and activity return to sustained growth. Overall, the report suggests that Asia Pacific remains a top destination for investment in real estate, with Singapore leading the way as a favored destination for global investors.