Asia-Pacific Real Estate Set for Growth in 2025

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On December 3rd, the Global Investor Outlook Report 2025 revealed a significant shift in the commercial property marketAfter two years of reduced trading activity, investor confidence has been rejuvenated, leading to an optimistic outlook for the marketThe Asia-Pacific region, in particular, is expected to see a rise in real estate activities in the coming yearThis change signifies a broader recovery and offers insights into the evolving dynamics of real estate investments in this crucial region.

Surveys conducted indicate that a remarkable 69% of respondents in the Asia-Pacific region intend to allocate more than 30% of their globally managed assets to the real estate sector within the next five yearsAdditionally, nearly 90% of these respondents anticipate that their environmentally, socially, and governance (ESG) compliant office properties will see a certain degree of value appreciation over the next three years

This transition aligns with global trends focusing on sustainability and responsible investing.

When it comes to investment preferences, many respondents show a positive outlook for industrial properties and office spacesApproximately 67% of participants have plans to invest in the Asia-Pacific region by 2025, with industrial and office properties remaining top choices for investorsThis trend reflects a balance between traditional real estate avenues and the growing demand in specific sectors that cater to ongoing market needs.

Globally, 61% of survey participants are considering investments in industrial properties and logistics, office spaces, and multi-family residential projects for 2025. In the Asia-Pacific arena, the same proportion, 61%, intends to invest in office properties located in core or core-plus business districts

This consistent focus suggests that urban centers will continue to draw investment due to their strategic importance and economic activity.

Chris Pilgrim, Managing Director of Global Capital Markets at Colliers Asia-Pacific, commented on the region's remarkable economic resilience and vitality, attributing the robust real estate market in part to the strong economic fundamentals present in the Asia-Pacific areaIn a rapidly changing global economic landscape, the region's stable growth, favorable political environment, and heightened policy support act as powerful magnets for investorsThe diversity of asset classes, including traditional occupancy-type properties like office buildings and shopping centers, as well as alternative assets like logistics real estate, data centers, and long-term rental apartments, further enhances this investment landscape.

Looking ahead, as the global economy gradually recovers, the attractiveness of the Asia-Pacific real estate market is anticipated to grow, drawing the attention of both international and local investors

In the face of rapid digitization and the surge of e-commerce, the logistics sector is rapidly becoming a focal point for investorsThe boom in e-commerce has led to rising logistics demands, making logistics real estate an appealing investment with considerable rental yields and asset appreciation potentialAs a burgeoning part of the market, logistics holds prime real estate for investment, underscoring its emergence as a mainstream player.

Pilgrim also noted a shift in investor expectations regarding target assets, highlighting a more rigorous approach in evaluating investment optionsInvestors are increasingly focusing on sectors with promising rental growth, particularly taking into account supply and demand dynamicsKey assets such as data centers, last-mile logistics facilities, and refrigerated warehouses are drawing heightened interest, especially in markets like Japan, Australia, and South Korea.

As we look toward the investment landscape in the first half of next year, various institutions and astute real estate funds are already setting their sights on Hong Kong and mainland China for deep exploration

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The vibrant economic growth, expansive consumer base, and evolving industrial ecosystems in these regions offer a wealth of lucrative opportunities, making them attractive propositions for value investors eager to capitalize on economic shifts.

In recent years, the Hong Kong SAR government has taken substantial steps to attract talent, unveiling comprehensive support policies spanning housing, taxation, and education to cultivate Hong Kong as an international educational hubAmidst this policy momentum, there has been a notable shift in investment direction, with growing interest in alternative assets, particularly student accommodationWith the steady rise in students coming to Hong Kong, the demand for quality housing is surging, creating promising prospects for investors.

For those ambitious investors looking to seize new opportunities in Hong Kong’s dynamic market, government incentives, strong market demand, and the promise of growth in sectors such as student housing act as illuminating signals