The annual Emerging Trends in Real Estate Global Outlook by PwC and the Urban Land Institute (ULI) for 2025 was released on March 12, revealing the top concerns among property investors in the Asia Pacific (Apac) region. The report, which compiles data from global asset managers including Blackstone, Savills Investment Management, and CBRE Investment Management, found that low yields and sluggish transaction volumes were among the biggest worries for investors. Over 70% of survey respondents cited low yields, persistently high interest rates, and geopolitical tensions as their top concerns.
Despite these challenges, the report notes that Asia Pacific remains an attractive market for diversification strategies due to its population growth, demographic metrics, and divergent monetary policies, such as Japan’s decision to raise short-term interest rates. In 2024, the region saw real estate transactions grow by 13% year-on-year, outpacing the growth in Europe, Middle East, and Africa (EMEA) at 12% and the Americas at 11%.
However, as Europe and North America enter a new capital markets cycle with expected improvements in transaction volumes, the Asia Pacific region is expected to experience sluggish transaction volumes. This was evident last year, as China’s transactions dropped by 25% year-on-year to US$418.3 billion ($557.6 billion), while Hong Kong SAR also saw a 1% dip to US$15.7 billion ($20.9 billion).
Meanwhile, investors in Europe have different concerns, with the top three worries among asset managers being international political instability (85%), an escalation of the war in the region (83%), and Europe’s economic growth (77%).
Data from MSCI, a leading US-based research and data analytics company, also shows that US commercial property prices stabilized in 2024, ending the year with a minimal decrease of 0.7%. As a result, investors may shift their focus and capital towards these regions in the coming months.
The report also revealed that data center assets scored highly for investment and development prospects across all three regions in 2025. Research from New York-based firm Green Street also showed a record demand for data centers in 2024, with asking rents increasing at a double-digit rate. MSCI’s latest research forecasts 2024 as a standout year for the asset class, with a 60% increase in acquisitions of existing data centers through single property and portfolio deals in the US.
In September of 2024, Blackstone and the Canada Pension Plan Investment Board (CPP) acquired data center firm AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board for over US$16 billion ($21.3 billion), marking the largest commercial real estate deal of the year in Asia Pacific and globally. This highlights the growing importance and potential for data centers in the market.