Institutional investments in the Asia Pacific (Apac) real estate market amounted to US$83.2 billion ($112 billion) in the second half of 2024, marking a 6% year-on-year increase, according to research conducted by Colliers. This brings the full-year investments for 2024 to US$155.9 billion, a significant 12% rise compared to the previous year. The study focuses on the top nine markets in the region, including Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand and Taiwan.
The steady increase in investments demonstrates the resilience of the Apac real estate market and sets the stage for a promising year ahead, according to Chris Pilgrim, Colliers’ managing director of global capital markets, Asia Pacific. He also notes that domestic investors have been the driving force of growth in key markets like South Korea, Taiwan, and New Zealand, contributing over 80% of real estate inflows in these countries during the second half of 2024.
The office sector emerged as the largest contributor to the Apac investment volume, accounting for US$26.5 billion or 32% of the total volume in the second half of 2024. For the entire year, office investments reached US$51.4 billion, a 14% increase from the previous year. The industrial and logistics sector followed closely, with investments totaling US$22.6 billion in the second half of 2024, constituting 27% of the total. This sector saw a 29% year-on-year rise, bringing the full-year investments to US$39.4 billion.
The retail sector bounced back significantly, with investments reaching US$15 billion in the second half of 2024, driven by substantial deals in countries such as Australia and South Korea. The total investments for the year was US$26.1 billion, marking a 27% increase compared to the previous year.
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Pilgrim believes that domestic capital will continue to dominate most markets in 2025, while offshore investments are expected to show improvement due to improving investor confidence and attractive valuations. The office and industrial segments are expected to maintain their robust performance, but Pilgrim predicts that retail, hospitality, and alternative asset classes will also gain traction as investors capitalize on the recovery momentum and evolving consumer trends. “With economic growth remaining strong and continued policy support, the Apac real estate market is well-positioned for sustained investment activity in 2025,” he adds.