Cushman & Wakefield data reveals a total of 263 active Real Estate Investment Trust (REIT) products in the Asia market as at Dec. 31, 2024, with a combined market value of US$235.8 billion, reflecting a year-on-year decline of 6.5%. The year 2024 was characterized by structural trends in the Asia REIT landscape. Firstly, the Chinese mainland REIT market achieved robust growth, surpassing Hong Kong in market value to secure a top-three position among Asia REIT markets. Meanwhile, mature markets such as Japan, Singapore, and Hong Kong witnessed market value contractions, influenced by shifts in the global financial environment. And finally, emerging markets such as Thailand, the Philippines, Malaysia, and India gained momentum, supported by strong domestic economic fundamentals.
Major Asian REIT markets also experienced widespread declines in stock prices through 2024, despite three interest rate reductions by the U.S. Federal Reserve in the second half of the year. Contributing factors included politically driven uncertainty, the pace of monetary policy adjustments, and the varying impacts of national interest rate policies. Among mature markets, Singapore stood out with heightened activity in equity financing and mergers and acquisitions (M&A). Singapore data centre REITs stand out as an example, with thriving activity bolstered by advancements in artificial intelligence (AI). Local office and hotel assets also continued to demonstrate resiliency in operational performance. In the Japan market, REITs recorded higher dividend yields, with hotel REITs outperforming due to surging demand from inbound tourism.
Looking ahead, the Asia REIT market is poised for continued evolution as it navigates the dual forces of mature market stabilization and emerging market expansion. The mature markets of Japan, Singapore, and Hong Kong will likely focus on enhancing operational efficiencies and optimizing capital structures, while grappling with the challenges posed by global monetary policy shifts and rising financing costs. On the other hand, emerging markets, particularly the Chinese mainland, Thailand, the Philippines, and India are expected to continue to grow, bolstered by strong economic fundamentals and supportive regulatory frameworks.
By asset sector, data centre and hospitality REITs are expected to remain highly visible on investors’ radar, driven by AI advancements and recovery in the tourism sector, respectively. Additionally, M&A activity is likely to pick up as players seek scale and diversification to better weather market fluctuations.
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