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.

To the casual observer, the current mood in global real estate markets appears a little subdued. Interest rates have remained higher for longer, constraining the funding environment, and geopolitical risk has soared, raising questions over how political decisions will impact economic growth and investment predictability in the months ahead.

Senior industry leaders canvassed for this Global edition of Emerging Trends in Real Estate® to paint a more nuanced picture. After two tough years, executives in Europe, the US, and Asia say that dealmaking is improving across all three markets. Indeed, European commercial real estate transaction volumes reached €188.8bn last year, 13.7 percent higher than in 2023. Real estate volumes also rebounded by 11.3 percent. And in Asia, volumes jumped by 13.4 percent.

The crosswinds shaping today’s global real estate markets point to a “corrugated” recovery. On the one hand, upward pressure on inflation, particularly in the US, suggests the hoped-for upswing in capital markets activity and occupier metrics may be delayed. That said, the monetary picture in slower-growing Europe is less concerning, with benchmark rates set to continue their decline, while some Asia markets are even seeing deflation. Given these conflicting dynamics, the consensus among industry leaders is for a “complex” year ahead. 

One positive trend is that higher rates have not prevented a partial rebound in the market for real estate debt. Large volumes of capital are reported to be waiting in the wings and banks are seen to be constructive in a generally less restrictive regulatory environment. Even so, the majority of industry leaders say that a strategic approach to investment is most likely to pay dividends in 2025. Smart investors are focusing on assets that are pulling away from the pack and offering diversification opportunities.

^{Source: 2025 Emerging Trends in Real Estate Regional Reports
Note: Arrows indicate changes in city rankings from 2024}

Some of the highest yielding opportunities in 2025 reflect the major themes shaping the global economy – namely the energy transition and extraordinary growth of artificial intelligence (AI) and data services.  

This year’s three regional Emerging Trends in Real Estate reports point to significant growth opportunities in both data centres and energy infrastructure, alongside an increasing focus on strategic regional plays, including energy security and data sovereignty. Indeed, data centres rank first among sectoral prospects in the Americas, Asia Pacific, and Europe, amid generally strong returns.

Still, data centre investment brings unique challenges, including the need for highly technical expertise and deep pockets to service capital costs that can run into the hundreds of millions of dollars. Moreover, the inherent dynamism of the underlying technology, as evidenced by the recent emergence of cheaper, less power-dependent versions of AI, suggests investors will need to stay agile to manage risks and maximize the opportunity.