PwC & ULI – Real Estate Trends Asia Pacific, 2024

The era of low-interest-rate investing that has been in place since the global financial crisis in 2008 has come to an end, as the US Federal Reserve has initiated a series of quick-fire rate hikes in mid-2022. Rising interest rates are leading to asset revaluations in the real estate markets, causing investors to be more cautious in underwriting deals. Many investors have moved to the sidelines, waiting for markets to reset, while traditional asset classes like core office and retail assets have lost their appeal. Instead, investors are pivoting towards alternative asset classes such as multifamily housing, logistics, data centers, and life science assets, which offer better long-term growth potential and protection against inflation. Energy intensity issues are also becoming more prominent, with market forces driving the need for buildings to comply with environmental standards to avoid potential discounts in valuations. Overall, the real estate trends in Asia Pacific in 2024 are characterized by a shift towards alternative assets and a growing awareness of transition risks related to energy intensity and environmental concerns.