Global M&A Trends in Real Estate: 2023 Mid-Year Outlook

Real estate investors will likely use M&A to capture future growth and returns as they respond to an ever-evolving environment.

Real estate M&A activity continues to moderate in the face of challenges caused by shifts in monetary policy to combat inflation, including interest rate hikes by the US Federal Reserve, the European Central Bank, and others. These have increased borrowing costs and put pressure on valuations globally. Commercial real estate is being severely affected by changes in the way businesses operate and people live, work, and play in a post-COVID-19 world, with some of these changes already present prior to the pandemic. However, we expect that these evolving preferences will continue to generate M&A opportunities as investors seek to capitalize on emerging investment themes, transform operating models, and reposition themselves for future growth.

Although capital markets remain tight, capital is still available for M&A, with private capital and select public company investors looking to accelerate their deployment activity in real estate to capitalize on the shifting environment. In the following six to 12 months, we expect private equity firms, family offices, sovereign wealth funds, and other investors with abundant capital to be more active in the M&A scene as they are attracted to lower valuations, distress situations and emerging themes—particularly those involving experiences (e.g., casinos, wellness resorts, and sports entertainment districts).

M&A activity in certain parts of the world is expected to be more dynamic than in others, with more capital being deployed in markets such as Australia, China, India, Japan, and the US. The Middle East, which has historically invested outward, is seeing more legislation in terms of international investment, paving the way for increasing inbound investments.

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‘From the Americas to the Middle East to Europe and to Asia, deals are getting done, capital is available, and unique investment opportunities continue to present themselves. While the overall environment is complex, these themes make me optimistic and keep dealmakers looking forward.’

Tim BodnerGlobal Real Estate Deals Leader, Partner, PwC US


2023 mid-year M&A outlook for real estate

Despite an extended period of macroeconomic uncertainties and increasing regulatory constraints in the real estate industry, business leaders are navigating these cyclical challenges by adopting a long-term approach and focusing on value creation to deliver sustained outcomes. With capital remaining available for M&A, we are optimistic that demand for high-quality properties around the world and fresh opportunities, particularly in the Middle East and Asia–Pacific, will translate to more vibrant deal activities over the next six to 12 months.

outlook

Explore our local M&A trends in Real Estate from the following countries or regions:

Want to know the M&A trends we expected in  the beginning of 2023?

Read our 2023 Outlook