Apac See Full Investment Recovery 2025 Singapores Market Parallel Global Narrative Savills
According to Savills Research, Asia Pacific’s (Apac’s) real estate market continues to outperform its global peers, with real GDP growth surpassing that of the US and Europe. In their global outlook report for 2025, released on November 28, Savills states that this is the first time in five years where there is more stability and assurance in the economic outlook.
Paul Tostevin, Savills’ Head of World Research, believes that this newfound stability will boost investment and activity in the market. In the first three quarters of 2024, Apac experienced a 4% y-o-y growth in investment volumes, reaching US$108.7 billion. The top three markets with the most significant y-o-y growth in investment volumes were Singapore (74% growth), South Korea (71%), and Australia (63%).
Savills Research forecasts a 27% increase in global real estate investment turnover to reach US$952 billion in 2025. They predict that by 2026, global investment activity will surpass the US$1 trillion mark for the first time since 2022.
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Savills also states that Singapore’s real estate market is expected to follow the global trend. Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, believes that Apac will see a complete recovery in investments next year. This recovery will be driven by sectors such as tourism, living, and industrial, particularly logistics and data centres.
Simon Smith, Savills’ Regional Head of Research & Consultancy for Apac, highlights the preconditions for a recovery in real estate investment interest in the region next year. He also mentions that longer-term structural trends will support values in growth markets like India and Southeast Asia. Smith adds that how global themes play out in the region and which countries are best positioned to take advantage of them will determine the winners and losers.
Savills affirms that Apac’s office sector remains attractive, accounting for 37% of total regional real estate investments in the first three quarters of 2024, significantly higher than the global average of 23%. Some of the top cities in the region for office utilization include Singapore, China, South Korea, and Japan, with occupancy rates exceeding 90%. Apac also stands out for having a high number of green-certified office spaces, as businesses place more importance on environmental, social, and governance (ESG) matters.
In Singapore, there is a growing emphasis on the green agenda, with office tenants giving it significant weightage. The market has also seen a slight recovery in activity levels, with more leases being concluded. It is predicted that rental rates for Grade-A office space in the Central Business District (CBD) will remain stable from 2025 to 2026.
Being a gateway to the region, Singapore is a popular destination for new overseas brands. Prime retail developments continue to experience strong demand, keeping rental levels firm. The industrial sector also remains strong, with key sectors like logistics, advanced manufacturing, healthcare, and data centres driving demand. This is expected to stabilize rental rates and capital values in the long run.
According to Cheong, the increasing adoption of artificial intelligence (AI) has led to the construction of more data centres in Singapore. Additionally, more data centre providers are using Singapore as a base to scout for locations to build infrastructure.
Tostevin concludes by stating that as global investment returns to sustained growth, the real estate industry must adapt to changing legislative landscapes and geopolitical dynamics. They also need to focus on sustainable and socially responsible development to meet the evolving needs of the world. In a report by UBS, it is stated that Apac is poised to be the top investment destination for family offices globally.