Global commercial real estate is showing early signs of entering a new investment cycle, according to the Emerging Trends in Real Estate® Global Outlook 2025 by PwC and the Urban Land Institute (ULI). But while optimism is growing, the report warns that heightened geopolitical volatility, ESG pushback, and capital market constraints are creating a complex path forward for investors, developers, and occupiers alike.
One of the most striking insights from this year's report is a shift in where capital is flowing. Assets at the "intersection of real estate and infrastructure", such as data centres and new energy infrastructure, are now attracting global interest. These operationally intensive assets reflect investor demand for long-term resilience, energy security, and digital expansion, three themes reshaping commercial real estate.
“The global real estate markets are sending out positive signals,” said Thomas Veith, Global Real Estate Leader at PwC. “Operational real estate, especially where tied to infrastructure, is emerging as the space with the most potential for outsized returns.” ULI’s Lisette van Doorn, CEO of ULI Europe, echoed this sentiment, noting, “There are pockets of opportunity, largely driven by structural growth trends, such as demographics, digitisation and the energy transition.”
While data centres and logistics are surging, the report also flags concerns for core sectors. The divide in sentiment around office space, especially non-prime stock, remains stark, with hybrid working continuing to depress demand in both the US and Europe. Meanwhile, decarbonisation remains a polarising issue: 67% of European leaders prioritise environmental factors, while pushback against ESG in the US is beginning to ripple into global sentiment.
Despite challenges, 2024 ended on a strong note in Europe with €188.8bn in CRE transactions, a 12% year-on-year rise, according to MSCI. However, lingering inflation, high interest rates in North America and APAC, and a splintering global political landscape could slow recovery. For developers and investors seeking growth, the report singles out senior housing, student accommodation, and markets like India and Indonesia as having untapped demographic-driven potential.
Successful real estate investment in 2025 and beyond will require agility, operational expertise, and a firm understanding of digital infrastructure and energy markets - areas where real estate is no longer just about location, but integration with the future economy.
People mentioned:
Lisette van Doorn, CEO, ULI Europe
Thomas Veith, Global Real Estate Leader, PwC
Companies mentioned:
Urban Land Institute (ULI) – Global research and education institute focused on the built environment
PwC – Global advisory and professional services firm
Full report: Emerging Trends in Real Estate® Global Outlook 2025
