Emerging Trends in Real Estate

This report is based on interviews with senior property investment professionals and regional surveys conducted jointly by PwC and the Urban Land Institute in Europe, United States and Canada, and Asia Pacific, and is a key indicator of sentiments on global real estate.

Despite economic headwinds around the world, the senior industry players canvassed for this Global edition of Emerging Trends in Real Estate® believe there is potential for renewed investment activity following greater clarity on monetary policy in the United States, Europe and Asia Pacific.

The hope is that buyers and sellers of properties are starting to accept a higher-for-longer interest rate environment and will therefore find the middle ground on pricing that has been so elusive over the past two years. 

With alignment on pricing comes the belief that real estate can recover from one of the worst investment downturns in years, although any upswing in activity is expected to be much more pronounced in 2025 than in 2024. But there is still a fair degree of caution in real estate, and diversification of risk by market and by sector will be critically important.

Although the industry has been in wait-and-see mode over the past two years because of short-term, cyclical forces, many are now looking to the long term. The message is clear that the driver of investor and occupier behaviour is no longer about the traditional property sectors, but increasingly about “the three Ds”: demographics, digital and decarbonisation.

The shifting preferences of both real estate occupiers and investors are creating new dynamics within the real estate sector, especially the growing importance of sustainability. Qualities like ESG performance and alignment with employees’ values are becoming important factors for companies deciding whether to occupy real estate. Offices are now expected to become physical embodiments of companies’ sustainability goals and the real estate sector is reacting accordingly, albeit slowly.

This trend is a tangible manifestation of demographic and technological shifts that are having major ramifications for real estate. Employee preference is increasingly driving demand in the corporate office sector. High-quality offices are increasingly in demand, with companies willing to spend a little more to attract top talent. As leases end, companies are increasingly opting to not renew leases in office spaces that do not align with employee preferences or ESG needs, and instead relocate.

As is often the case, occupier-driven changes (like those witnessed in retail and office) can, in hindsight, end up being quite significant, but also sometimes go below the radar. With that in mind, our research for this Global edition has sought to consider some possible future changes over the next ten years and what that could mean in terms of how real estate investors and operators need to rethink their business and delivery models, embrace innovation and create value beyond the physical space so as to remain relevant and competitive.