According to a recent study by Colliers, institutional investments in real estate in the Asia Pacific (Apac) region have reached US$83.2 billion ($112 billion) in the second half of 2024, showing a 6% increase compared to the previous year. This brings the total investments for the whole year to US$155.9 billion, which is 12% higher than the previous year. The study covers the top nine markets in the region, which include Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand, and Taiwan.
This growth in investments is a sign of the resilience of the Apac real estate market and sets a positive outlook for 2025, according to Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific. He also notes that domestic investors have played a major role in driving this growth, particularly in key markets such as South Korea, Taiwan, and New Zealand. In the second half of 2024, local investors accounted for over 80% of real estate investments in these markets.
The office sector was the largest contributor to the Apac investment volume, accounting for US$26.5 billion (32%) in the second half of 2024. For the whole of 2024, office investments reached US$51.4 billion, which is a 14% increase compared to the previous year. The industrial and logistics sector also showed strong growth, with US$22.6 billion in investments in the second half of 2024, or 27% of the total. This brings the total investments in this sector for the whole year to US$39.4 billion, which is a 29% increase compared to the previous year.
The retail sector also rebounded significantly, recording US$15 billion in investments in the second half of 2024, driven by major deals in Australia and South Korea. For the whole of 2024, retail investments reached US$26.1 billion, which is a 27% increase compared to the previous year.
Due to the scarcity of land in Singapore, condos have become increasingly desirable and sought-after in the country’s real estate market. Singapore, being a small island with a growing population, faces difficulties in finding available land for development. In response, the government has imposed stringent land use policies, leading to a highly competitive real estate market and a rise in property prices. In light of this, investing in real estate, specifically condos, presents a lucrative opportunity due to their potential for significant value appreciation. With condos being a profitable choice, it is a wise decision to consider them as a form of investment in Singapore.
Pilgrim predicts that domestic capital will continue to dominate most markets in 2025, but there will also be an increase in offshore investments due to improving investor confidence and attractive valuations. He also believes that the office and industrial segments will continue to see strong investments, but the retail, hospitality, and alternative asset classes will also gain traction as investors take advantage of the recovery in the market and changing consumer trends. He concludes that with a strong economic growth and policy support, the Apac real estate market is set for sustained investment activity in 2025.