06 Mar 2022 06:00AM
According to the March 12 report titled Emerging Trends in Real Estate Global Outlook by PwC and the Urban Land Institute (ULI), low yields and sluggish transaction volumes were among the top concerns for property investors in the Asia Pacific (Apac) region.
The report gathered investor sentiment from global asset managers, including Blackstone from the US, Savills Investment Management from the UK, and CBRE Investment Management. Over 70% of respondents cited low yields, high interest rates, and geopolitical tensions as the top three concerns for investors.
(Source: Emerging Trends in Real Estate Asia Pacific 2025 survey)
The report highlights that despite these concerns, Asia Pacific remains an attractive market for industry leaders due to its population growth and demographic metrics, as well as its diverse monetary policies, such as Japan’s decision to raise short-term interest rates.
Last year, real estate transactions in the region grew by 13% year-on-year to US$173.5 billion (S$231.3 billion), surpassing other regions such as Europe, the Middle East and Africa’s (EMEA) 12% growth and the Americas’ 11% growth.
(Source: Emerging Trends in Real Estate 2025 survey)
However, as Europe and North America kick-start a new capital market cycle with expected improvements in both regions, Asia Pacific transaction volumes are expected to remain sluggish.
In 2021, liquidity in Asia Pacific was affected by a drop in transaction volume. In China, transactions decreased by 25% year-on-year to US$418.3 billion (S$557.6 billion), while Hong Kong SAR saw a 1% dip in transaction volume to US$15.7 billion (S$20.9 billion).
Meanwhile, investors in Europe face different concerns, with the top three mentioned by asset managers being international political instability (85%), further escalation of war (83%), and Europe’s economic growth (77%).
(Source: Emerging Trends in Real Estate Europe 2025 survey)
Data from MSCI, a leading US-based research and data analytics company, also showed that US commercial property prices stabilized last year, ending the year down by only 0.7%. As a result, investors may focus their attention and capital on these regions in the coming months.
The report also revealed that data center assets scored the highest for investment and development prospects across all three regions in 2025.
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According to research firm Green Street based in New York, 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 predicts that 2024 will be a standout year for the asset class, with acquisitions of existing data centers through single property and portfolio deals increasing by more than 60% in the US.
Last September, Blackstone and the Canada Pension Plan Investment Board (CPP) acquired data center company AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board for more than US$16 billion (S$21.3 billion). This deal was the largest commercial real estate transaction recorded in Asia Pacific and globally in 2024.