Rewritten:
The latest Emerging Trends in Real Estate Global Outlook, co-published by PwC and the Urban Land Institute (ULI) on March 12, revealed that low yields and slow transaction volumes are among the top concerns for property investors in the Asia Pacific (APAC) region this year. The report gathered insights from global asset managers, including leading firms such as Blackstone, Savills Investment Management, and CBRE Investment Management.
Results from the survey showed that over 70% of respondents listed low yields, high interest rates, and geopolitical tensions as their main concerns. However, the report also noted that many industry leaders still view APAC as an attractive option for diversification due to its growing population and other demographic factors. Additionally, the region’s monetary policies, such as Japan’s commitment to raising short-term interest rates, make it a promising investment destination.
In 2025, APAC’s real estate market saw a growth of 13% year-on-year, reaching a total transaction volume of US$173.5 billion (SGD231.3 billion). This outperformed other regions such as Europe, Middle East and Africa (EMEA) with a 12% year-on-year growth and the Americas with an 11% year-on-year growth.
However, as Europe and North America enter a new capital market cycle with expected improvements in transaction volumes, APAC is projected to have a slower pace of growth. Last year, the region’s liquidity was affected by a decline in transaction volume, with a 25% year-on-year decrease in China to US$418.3 billion (SGD557.6 billion) and a 1% decrease in Hong Kong SAR to US$15.7 billion (SGD20.9 billion).
In contrast, European investors face different concerns, with the top three areas being international political instability (85%), escalation of conflicts (83%), and economic growth (77%).
Data from leading US-based research and data analytics company MSCI also show that US commercial property prices remained stable in 2025, with only a 0.7% decrease. As a result, investors may shift their focus and capital to these regions in the coming months.
The report also highlighted that data centre assets have the highest investment and development prospects in all three regions for 2025. According to research from Green Street, the global demand for data centres reached record levels last year, with asking rents increasing at a double-digit rate. The latest research from MSCI predicts that 2024 will be a significant year for this asset class, with a 60% increase in acquisitions of existing data centres through single property and portfolio deals in the US.
In September of last year, 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 (SGD21.3 billion). This deal was the largest commercial real estate transaction in APAC and globally in 2024.