Apac See Full Investment Recovery 2025 Singapores Market Parallel Global Narrative Savills
Savills Research has recently released its global outlook report for 2025, and according to the firm, Asia Pacific’s (Apac’s) real estate market is continuing to outperform its global counterparts. In fact, real GDP growth in the region is exceeding that of both the US and Europe.
Paul Tostevin, Savills’ Head of World Research, states that there is a newfound stability and conviction in the economic outlook for the first time in five years. 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 growth in investment volumes, reaching US$108.7 billion. The three markets that experienced the most significant 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 increase by 27% to US$952 billion in 2025. By 2026, this number is expected to surpass US$1 trillion for the first time since 2022.
Alan Cheong, Executive Director of Research and Consultancy at Savills Singapore, adds that Singapore’s real estate market is expected to follow the global trend.
Savills also expects a full investment recovery in Apac next year, driven by sectors such as tourism, living, and the industrial sector, specifically logistics and data centers. Simon Smith, Savills’ Regional Head of Research and Consultancy for Apac, predicts that the region’s long-term structural trends will support values in growth markets like India and Southeast Asia. He also believes that how global themes play out in the region will determine the winners and losers.
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The office sector in Apac remains attractive, accounting for 37% of total regional real estate investment in the first three quarters of 2024 – significantly higher than the global average of 23%. Singapore, China, South Korea, and Japan have the highest office occupancy rates in the region, exceeding 90%. Additionally, Apac remains a stronghold for green-certified office spaces as office occupiers place a greater emphasis on environmental, social, and governance (ESG) matters.
In Singapore specifically, office tenants are increasingly prioritizing the green agenda. There has also been a slight recovery in activity levels, with more leases being concluded. Prime retail developments are also seeing healthy demand, keeping rental levels firm.
Despite cost pressures, demand for industrial spaces remains strong in sectors like logistics, advanced manufacturing, healthcare, and data centers. This is expected to help stabilize rental rates and capital values in the long term. According to Alan Cheong, there has been an increase in the adoption of artificial intelligence (AI) in Singapore, leading to the construction of more data centers in the city-state. More data center service providers are also using Singapore as a springboard to search for suitable sites to build their infrastructure.
Tostevin concludes by stating that as global investment and activity 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 needs of a changing world. Savills predicts that Apac will be the top investment destination for family offices globally, further solidifying the region’s position as a strong market for real estate investment.
