EXECUTIVE SUMMARY
The deglobalisation trend should be positive for real estate demand. The global theme that we are
watching is the security of everything.
As a consequence, investors are placing even more
onus on diversification across countries and sectors.
Pricing in many European and Asia Pacific markets
is also judged to have fallen far enough to offer an
attractive trade-off with risk. Another plus point is
that occupier markets remain relatively healthy even
in the face of weak economic conditions. Overall,
the interviews reflect a strong belief that the resilient
qualities of real estate should still shine through,
despite the volatility.
The trade-offs between re-pricing and risk are evident
in retail and offices. Both sectors are seen as highly
investable in select markets. Indeed, grocery-based
retail and local shopping centres, in particular, are
drawing in investors across all three regions. MSCI
data show that offices accounted for $195.80 billion
of deals in 2025, which represented an 18 percent
increase year-on-year and the largest allocation
shift of all sectors despite ongoing post-pandemic
occupancy issues. The interviews highlight both
sectors as important counter-cyclical plays in 2026.
But when quizzed on the biggest opportunities for the
industry in the year ahead, the interviewees invariably
refer to artificial intelligence (AI) and with it the
extraordinary global growth of data centres, a sector
that epitomises the blurring of boundaries between
real estate and infrastructure.
Once again, data centres lead the respective sector
rankings for investment prospects in the Europe and
United States & Canada Emerging Trends reports.
According to respondents to the Asia Pacific survey,
the sector is the most attractive niche property type
for the coming year.
It was the 2024 edition of Global Emerging Trends
which signalled the sector was moving from niche to
mainstream in Western markets albeit still with small
capital allocations compared with traditional sectors.
The interviews for this year’s Global report suggest
that prediction is coming to pass despite ongoing
concerns about an “AI bubble” allied to the vast
capital expenditure plans of the big tech firms for data
centre mega-campuses in the US.
The interviewees also note the obsolescence risks
from technology advances and the serious issues
around water and energy usage. “The risk of not
getting it right is high,” says one global player, “but it’s
a key megatrend. You also don’t want to miss out in
full on the opportunity as it is here to stay.”
Such opportunities also underline the challenge
the industry faces in upholding its commitment to
sustainability. The three regional reports indicate
an evolving approach to environmental, social, and
governance (ESG) strategies in real estate. Views
on sustainability vary widely across Asia Pacific
although there is a growing consensus that asset
owners need to focus on deliverable and measurable
initiatives. European leaders see ESG increasingly
as a pragmatic, rather than philosophical, endeavour.
Emerging Trends US & Canada does not refer to
ESG at all, focusing instead on ideas such as asset
resilience in the face of climate change.
The underlying commitment is still evident. As one
interviewee concludes: “Sustainability is not throwing
money after ideological things. We are always
showing our investors that it will ultimately lead to a
better value story.”
