Global Real Estate Perspective February 2025

The economic outlook for the remainder of 2025 is broadly positive despite persistent uncertainty. Higher yields on government bonds and benchmark debt costs have tightened financial conditions over recent months, while risks remain from geopolitics and policy shifts, supply chain disruptions and the potential for a resurgence in inflation. While there are plenty of challenges, there are also reasons for optimism as labor markets are still tight, unemployment rates low and real wage growth positive in most countries.

Occupier activity is varied across markets and property types. Global office leasing volumes rose by 9% in 2024 to the highest annual level since 2019 and are expected to increase further this year, as progress on office attendance policies and growing headcounts give companies more confidence in their workplace needs. Retail and hospitality demand remains robust, boosted by resilient consumers and international travel to urban destinations. In the logistics sector occupiers are displaying greater caution as they contend with higher costs and focus on maximizing utilization of existing capacity before committing to new space.

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