Apac See Full Investment Recovery 2025 Singapores Market Parallel Global Narrative Savills
The Asia Pacific (Apac) real estate market continues to outshine its global counterparts, with strong economic growth and increasing investment, according to Savills Research’s 2025 global outlook report released on November 28.
Savills head of world research, Paul Tostevin, notes that there is now more stability and confidence in the region’s economic outlook, which is expected to boost investment and activity in the market.
In the first three quarters of 2024, Apac saw a 4% year-on-year growth in investment volumes, reaching US$108.7 billion. Singapore, South Korea, and Australia were the top three markets with the most significant growth in investment volumes during this period, with 74%, 71%, and 63% respectively.
Savills Research forecasts that global real estate investment turnover will increase by 27% to US$952 billion in 2025. This is expected to surpass the US$1 trillion mark by 2026, the first time since 2022.
In line with global trends, Savills predicts that the Singapore real estate market will experience a similar recovery. Alan Cheong, executive director of research and consultancy at Savills Singapore, says that the region’s real estate market is expected to follow the global narrative.
Savills also anticipates a full recovery in Apac’s real estate investment next year, driven by sectors such as tourism, living, and industrial, specifically logistics and data centres. Simon Smith, regional head of research and consultancy for Apac at Savills, explains that while longer-term structural trends will support growth in markets such as India and Southeast Asia, the outcome of global themes and who can take advantage of them will determine the winners and losers.
The office sector remains a dominant force in Apac, accounting for 37% of total regional real estate investment in the first three quarters of 2024. This is significantly higher than the global average of 23%. Singapore, China, South Korea, and Japan are the top cities in the region for office occupancy, with rates exceeding 90%. Apac also maintains a strong presence of green-certified office spaces, as more office occupiers prioritize environmental, social, and governance (ESG) factors.
In Singapore, there is a growing emphasis on the green agenda among office tenants. There has also been a slight rebound in activity levels, with more leases being concluded. Rental rates for Grade-A space in the Central Business District (CBD) are expected to remain stable from 2025 to 2026. Additionally, Singapore’s role as a hub and gateway to the region makes it an attractive destination for international brands. Prime retail developments continue to see strong demand, keeping rental levels stable.
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The industrial sector in Singapore is also thriving, with strong demand in key sectors such as logistics, advanced manufacturing, healthcare, and data centres. This is expected to help stabilize rental rates and capital values in the long term. Cheong notes that the increasing adoption of artificial intelligence is leading to a higher demand for data centres in Singapore, with more providers using the city-state as a launchpad for expanding their infrastructure.
As global investment and activity levels continue to grow, the real estate industry must adapt to changing legislative landscapes and geopolitical dynamics while ensuring sustainable and socially responsible development to meet the evolving needs of the world, adds Tostevin.
According to UBS’s latest report, Apac is poised to become the top investment destination for family offices worldwide. With its strong economic growth and attractive real estate market, the region is proving to be a lucrative destination for investors.