Private markets

Global Real Estate Outlook: Seizing on the Cyclical Uplift

Key takeaways


The real estate market appears to be pivoting

The global real estate market appears to be emerging from the most recent downturn in capital values. Interest rate stabilization is providing some clarity to pricing and driving more buyers to the table. However, the future investment landscape will likely be more volatile than what was experienced in the post-GFC era.


Nascent signs of increased activity

Institutional investors are hopping back into bidding tents, and lenders are returning to the market, indicating nascent signs of life for improving investment activity. Transactions will likely meaningfully recover in the second half of 2024, aiding price discovery.


Resilient demand and at a cyclical trough

Demand drivers are expected to remain resilient over the next few quarters, supporting real estate fundamentals. At the same time, investors today can benefit from entering at the cyclical trough and capitalizing on dislocated pricing while aligning with key structural trends.

A whole new world of reshoring and near-shoring

Geopolitical fragmentation is a key mega force that will shape the future world in the new investment regime of higher macro and market volatility, and the BlackRock Investment Institute has highlighted it as a key investment theme for all asset classes. A cascading of recent events, including the U.S. trade wars, the pandemic, and the Ukraine invasion, have built on each other and exacerbated volatility.

Companies globally have been adjusting to this new world by rewiring their supply chains to build greater resilience in the face of disruptive events. Localizing supply chains can shield against supply risks and help businesses adjust quickly to changes in demand and supply. The U.S. has seen an uptick in investment in manufacturing, consistent with higher-than-average job openings in manufacturing and good wage growth. In Europe, nearly two thirds of countries say they plan to restructure their supply chain in the next five years, with the most noted concern being ongoing political instability (source: Inverto).

The rewiring of supply chains will likely create more opportunities for real estate investors. For tenants, having the right industrial/logistics assets is key for an optimized and more localized supply chain. At the same time, real estate investors likely need to ensure investments are future proofed for the supply chains of tomorrow.

U.S. manufacturing activity has increased
Quotation start

The global real estate market has likely found a bottom, at least in the transactions market. Investment activity is expected to pick up and expected improvements in transaction volumes will aid price discovery for many market participants.

Simon Durkin

Research & Strategy Team

Simon Durkin
Head of EMEA Real Estate Research
Alex Symes
Head of US Real Estate Research
Yasmine Kamaruddin
U.S. Real Estate Research
Chloe Soar
EMEA Real Estate Research

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