The latest Emerging Trends in Real Estate Global Outlook for this year, published by PwC and the Urban Land Institute (ULI) on March 12, highlighted some of the top concerns among property investors in the Asia Pacific (Apac) region, including low yields and sluggish transaction volumes.
The report compiled investor sentiment from global asset managers, including companies like US-based Blackstone, UK-based Savills Investment Management, and CBRE Investment Management. According to the survey, over 70% of respondents cited low yields, persistently high interest rates, and geopolitical tensions as their biggest concerns.
(Source: Emerging Trends in Real Estate Asia Pacific 2025 survey)
Despite these concerns, the report noted that Asia Pacific continues to be an attractive market for diversification for industry leaders, due to its growing population, demographic metrics, and divergent monetary policies, such as Japan’s decision to hike short-term interest rates.
In 2024, real estate transactions in the region grew by 13% year-on-year to US$173.5 billion (S$231.3 billion), surpassing growth in other regions like Europe, Middle East and Africa (EMEA) at 12% year-on-year, and the Americas at 11% year-on-year.
(Source: Emerging Trends in Real Estate 2025 survey)
However, as Europe and North America prepare for an upcoming capital markets cycle, with transaction volumes expected to improve in both regions, Asia Pacific is expected to see sluggish transaction volumes. In 2024, liquidity in Asia Pacific was impacted by a drop in transaction volume. For example, in China, transactions decreased by 25% year-on-year to US$418.3 billion (S$557.6 billion), while Hong Kong SAR saw transaction volume decline by 1% year-on-year to US$15.7 billion (S$20.9 billion).
Meanwhile, asset managers in Europe are dealing with different concerns, with the top three prevailing areas of concern being international political instability (85%), further escalation of the war in the region (83%), and Europe’s economic growth (77%).
(Source: Emerging Trends in Real Estate Europe 2025 survey)
Data from leading US-based research and data analytics company, MSCI, also showed that US commercial property prices stabilized last year, ending the year with only a 0.7% decrease. As a result, investors may shift their focus and capital towards these regions in the coming months.
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The report also revealed that data center assets have the highest investment and development prospects across all three regions in 2025. According to New York-based research firm, Green Street, global demand for data centers reached record levels last year, with asking rents growing at a double-digit pace. In its latest research, MSCI also forecasts 2024 as a standout year for this asset class, with acquisitions of existing data centers through single property and portfolio deals increasing by over 60% in the US.
Last September, Blackstone and the Canada Pension Plan Investment Board (CPP) purchased data center firm AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board for over US$16 billion (S$21.3 billion), the largest commercial real estate deal ever recorded in Asia Pacific and globally for 2024.
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