• Greater economic stability as trade concerns ease. While growth remains subdued, major markets are expected to see continued economic expansion in 2025. The outlook for next year is more positive, supported by lower average interest rates and a more predictable global trading environment.

• Global real estate markets remain resilient through the third quarter. Pent-up industrial demand is building, with activity rising in several markets. Retailers continue to expand in core locations, while global office leasing in 2025 is at its highest level in six years.

• Investor sentiment is improving notably, resulting in a more competitive transactional market. Direct investment volumes growth continues to rebound and accelerated during the third quarter, signaling investors’ increased confidence in the market.

Office leasing demand continued to increase moderately from the previous year during Q3. Expansionary demand in North America pushed take-up higher, while longer deal timelines in Europe and Asia Pacific contributed to lower activity. Following on from a strong first half, global volumes over the first nine months of the year were at their highest level since 2019.

Future trends: 2025 set to be strong year for global living investment

Short-term: A strong Q3 and healthy pipeline of multifamily opportunities in the U.S and student accommodation portfolios in Europe and Asia Pacific means that living investment in 2025 should reach pre-Covid levels for the first time in over three years. Apartment construction challenges in Europe and signs of slowing rental demand in the U.S. may weigh on the sector’s growth trajectory next year.

Long-term: Continued housing shortages relative to the long-term growth in demand should see living remain the world’s largest real estate investment sector over the cycle. Many established markets will see continued emphasis on asset repositioning towards higher density operational living types such as PBSA and coliving.