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Not only are these shifts changing the real estate scene in the area, but they are also playing a role in the investment decisions of those aiming to benefit from fresh opportunities.

Here is a closer look at the top three significant trends that dominated the real estate space in 2024 that you need to know:

Sustainability and Green Real Estate

Sustainability is no longer just a buzzword—it is a critical factor in investment decisions. Across Asia, the demand for environmentally-friendly real estate has skyrocketed, with investors increasingly seeking properties that meet rigorous environmental standards.

Cities like Tokyo, Seoul, and Singapore are the key regions leading the charge, setting a premium on eco-friendly properties as part of broader Environmental, Social, and Governance (ESG) goals.

This shift is particularly evident in commercial real estate, where green-certified buildings are attracting both tenants and investors, with this increased demand expected to outpace new supply. 

Thus, developers are embracing sustainability by retrofitting older buildings and incorporating green features into new developments to meet demand. This trend is fuelling investment in energy-efficient technologies and sustainable building practices, offering long-term growth opportunities for those aligned with ESG principles.

Rise of Alternative Assets

In 2024, traditional real estate sectors like office and retail faced headwinds due to economic uncertainty, higher interest rates, and shifting demand.  As a result, investors are diversifying their portfolios into alternative assets. 

Data centres, multifamily housing, and logistics properties are becoming the new focus. The multifamily sector, driven by changing demographics and growing urban populations, is robust in cities like Tokyo and Hong Kong.

Additionally, data centres are experiencing unprecedented demand, particularly in tech-driven markets like India, where digital infrastructure is booming and growth in this local sector is projected to see US$10 billion in investments over the next three years.

As alternative assets offer stable returns uncorrelated to traditional real estate cycles, investors are increasingly shifting focus towards these sectors. This diversification proves especially advantageous in high-interest-rate environments, where conventional real estate often falls short of meeting expectations. 

This evolving investment landscape significantly impacts employment within the real estate sector, creating heightened demand for professionals skilled in navigating the complexities of alternative asset classes, including valuation, financial modelling, and regulatory compliance.

Want to know more about the salaries of real estate professionals? Take a look at FP Global's 2024 Real Estate Salary Guide for detailed information on compensation trends.

Office Space Optimisation and the "Flight to Quality"

The office space market continues to evolve in 2024, mainly as companies adjust to the hybrid work model and seek real estate that meets new employee expectations. 

A growing trend is the "flight to quality," where tenants are choosing high-grade, sustainable office spaces over traditional, less flexible options. CBRE Asia's Pacific Research report "Flight to Quality in the Asia Pacific Office Market" noted that this shift is driven by the desire for offices in core locations with eco-friendly features and the need for flexible workspaces that support changing work patterns.

In 2024, the demand for premium office spaces in Asia increased by about 10.7% year-on-year, while traditional office space experienced slower growth, with cities like New Zealand and Singapore witnessing a surge in demand for well-located, sustainable buildings, with annual office leasing growth in these markets exceeding 30%.

The "flight to quality" trend is a boon for developers and landlords who have invested in green, tech-enabled office buildings. These premium assets command higher rents and achieve more stable occupancy, making them attractive for long-term investments with dependable returns.

The real estate market in Asia is undergoing a profound transformation in 2024, driven by sustainability, diversification, and a shift towards higher-quality assets. For investors, these trends represent key opportunities to align portfolios with evolving market demands. 

The effects of this transformation are expected to carry over into 2025, shaping the investment landscape and influencing decision-making. Whether embracing green certifications, exploring alternative assets, or targeting prime office spaces, those who adapt to these trends are well-positioned to reap the rewards as the Asian real estate market evolves.

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