### Global Real Estate Leaders Brace for More Uncertainty
As the next real estate cycle begins, global real estate leaders remain cautiously optimistic, according to the Urban Land Institute and PwC’s *Emerging Trends in Real Estate: Global Outlook 2025*. A U.S. investment banker indicated that transaction volumes are expected to rise, with hospitality, retail, and office sectors leading the way.
However, the report, which gathered insights from global real estate professionals, also highlighted concerns. Political risk continues to be a significant challenge for many industry leaders.
“The backdrop to the latest interviews included martial law being declared in South Korea in the final weeks of 2024, the slew of executive orders in the early days of the new U.S. administration, and political tensions created in the build-up to the election in Germany in February,” the report stated. As a result, the industry remains vigilant, monitoring how political developments and ongoing conflicts in Ukraine and Gaza will affect economic growth and monetary policy.
### Key Industry Concerns
#### The Office Sector: Uncertainty Persists
While some regions are seeing signs of recovery, the future of office space remains uncertain. The report highlighted a sharp divide in opinions regarding the outlook for non-prime office properties in the U.S. and Europe. In contrast, hybrid work is less of a concern in the Asia-Pacific region.
#### Residential Market: Stronger Consensus
There is general agreement that residential real estate remains a strong investment, with senior and student housing expected to be among the top-performing assets in 2025. However, a widespread supply-demand imbalance continues to shape the market.
#### Infrastructure Real Estate: Potential for Outsized Returns
Industry leaders pointed to significant opportunities in assets at the intersection of real estate and infrastructure, including logistics facilities, data centers, and energy-related properties. The report advised investors to look beyond traditional real estate metrics and consider factors such as digitalization, artificial intelligence expansion, growing power demands, and increasing regional independence in energy security and data sovereignty.
As the industry navigates these challenges, real estate leaders remain focused on adapting to emerging trends and mitigating risks in an increasingly uncertain global environment.
