According to this year’s Emerging Trends in Real Estate Global Outlook by PwC and the Urban Land Institute (ULI), published on March 12, low yields and “sluggish” transaction volumes were some of the top concerns among property investors in the Asia Pacific (Apac) region.
The report compiles investor sentiment from global asset managers, including US-based Blackstone, UK-based Savills Investment Management and CBRE Investment Management.
Over 70% of survey respondents highlighted low yields, persistently high interest rates, and geopolitical tensions as the top three concerns among investors.
(Source: Emerging Trends in Real Estate Asia Pacific 2025 survey)
The report notes that industry leaders continue to find Asia Pacific appealing as a diversification strategy given its population growth and other demographic metrics, as well as its divergent monetary policy, such as Japan’s resolve to hike short-term interest rates.
Last year, real estate transactions in the region grew by 13% y-o-y to US$173.5 billion ( $231.3 billion), beating out the other regions such as Europe, Middle East and Africa’s (EMEA’s) 12% y-o-y growth, and the Americas’ 11% y-o-y growth.
(Source: Emerging Trends in Real Estate 2025 survey)
However, as Europe and North America look to kick-start a new capital markets cycle with volumes set to improve still further in both regions, transaction volumes in Apac are expected to remain ‘sluggish’.
Liquidity in Asia Pacific last year was affected by a drop in transaction volume. In China, transactions contracted by 25% y-o-y to US$418.3 billion ($557.6 billion), while Hong Kong SAR saw transaction volume dip 1% y-o-y to US$15.7 billion ($20.9 billion).
Meanwhile, investors grapple with very different concerns in Europe. The top three prevailing areas of concern for the region among asset managers were international political instability (85%), a 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 MSCI, a leading US-based research and data analytics company, also show that US commercial property prices stabilised last year, ending the year down just 0.7%. Therefore, investors may focus their attention and capital more on these regions in the coming months.
The report also revealed that data centre assets scored highest for investment and development prospects across all three regions in 2025.
According to New York-based research firm Green Street, global demand for data centres reached record levels last year, with asking rents growing at a double-digit pace. In its latest research, MSCI also marks 2024 as a stand-out year for the asset class, with acquisitions of existing data centres 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 centre firm AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board for over US$16 billion ($21.3 billion). It was the largest commercial real estate deal ever recorded in Asia Pacific and globally for 2024.
