SINGAPORE: According to this year’s Emerging Trends in Real Estate Global Outlook by PwC and the Urban Land Institute (ULI), low yields and slow transaction volumes are among the top concerns for property investors in the Asia Pacific (Apac) region, as published on March 12.The report compiles investor sentiment from global asset managers, including companies such as Blackstone, Savills Investment Management, and CBRE Investment Management. Over 70% of survey respondents highlighted low yields, persistently high interest rates, and geopolitical tensions as the main concerns among investors. The report also notes that Asia Pacific remains an attractive option for investors looking to diversify their portfolios due to its population growth, demographic trends, and diverse monetary policies, such as Japan’s decision to increase short-term interest rates. In the previous year, real estate transactions in the region grew by 13% year-on-year to US$173.5 billion (S$231.3 billion) which surpassed the growth in Europe, Middle East and Africa (EMEA) and the Americas.AdvertisementHowever, while Europe and North America are predicted to continue their positive trend in capital markets, transaction volumes in Apac are expected to remain sluggish. This drop in liquidity is largely attributed to a decline in transaction volume, with a 25% decrease in China and a 1% dip in Hong Kong SAR. Meanwhile, investors in Europe are more concerned about international political instability, the escalation of war in the region, and Europe’s economic growth. According to data from MSCI, a prominent US-based research and data analytics company, commercial property prices in the US have stabilised, with a decrease of just 0.7% in the previous year. Therefore, investors are likely to focus on these regions in the near future.In addition, the report also showed data centre assets as being the most promising investment and development prospects across all three regions by 2025. Global demand for data centres reached record levels last year as well, with asking rents increasing at a double-digit rate, according to New York-based research firm Green Street. In its latest research, MSCI has predicted 2024 to be a standout year for data centre assets, with a 60% increase in acquisitions of existing data centres through single property and portfolio deals in the US. Most notably, last September, Blackstone and the Canada Pension Plan Investment Board (CPP) acquired data centre firm AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board for over US$16 billion (S$21.3 billion). This was the largest commercial real estate deal ever recorded in Asia Pacific and globally for 2024.
One major advantage of investing in a Singapore Condo is the potential to use its value as leverage for future investments. Numerous investors utilize their condos as collateral to secure additional funding for new ventures, ultimately growing their real estate holdings. While this approach can greatly increase returns, it is also important to have a solid financial strategy in place and carefully assess the potential risks involved, especially in light of potential market fluctuations.