Singapore leads growth of APAC’s commercial real estate transaction volume

The country has a key position in APAC’s real estate market.

Asia Pacific’s real estate market will see a modest improvement in 2025 and Singapore has several key roles to play in it, a report by CBRE reveals.

APAC GDP growth is forecasted to reach 4.1% in 2025, slightly above the estimated 3.9% expansion for 2024. Economic growth will accelerate in India, Australia, and Japan, driven by government spending as well as higher consumption. Upward momentum is expected to slow in Greater China and Korea due to sluggish consumer spending. ​

CBRE forecasts commercial real estate transaction volume to rise 5% to 10% year-on-year in 2025, driven by growth in Singapore, Korea, Australia and Hong Kong SAR, and continued investor interest in Japan and India. With individual Asia Pacific markets at different stages of the pricing cycle, yield movement will diverge across individual markets.​

Investors' interest will be interested on office spaces, with Singapore one of the major focuses along with Australia and Korea.

The report noted that except for visitors to Hong Kong SAR and Singapore, outbound travel from mainland China continues to lag pre-pandemic highs due to weaker domestic demand.

Arrivals from mainland China accounted for 22% of total tourist arrivals in Asia Pacific as of the latest available data in 2024, well below 2019’s 30%. Travellers from mainland China are more cost-conscious due to current economic headwinds affecting their market, with their focus shifting to more short-haul and emerging destinations within Asia Pacific. Markets with visa-free policies such as Singapore, Hong Kong SAR and Japan will be the focus for mainland Chinese tourists in 2025.

For APAC, consumer sentiment is expected to improve in 2025 amid the solid employment market, leading to stronger retail sales growth. Regional retail rents will continue their slow but steady recovery as retailers retain a cautiously optimistic attitude towards real estate planning. Leasing demand will be focused on prime core assets, with absorption of vacant secondary space remaining slow amidst limited retailer interest.