Our View: Best Opportunities in Global Real Estate for 2025

We believe the best global real estate investment opportunities in 2025 will be found where macro conditions, secular tailwinds and evolving sector use cases intersect with high-conviction strategies, operational expertise and skillful execution.

The past two years were marked by elevated interest rates, persistent inflation and heightened geopolitical uncertainty, significantly impacting liquidity, capital flows and investor sentiment. These conditions led to subdued transaction activity and repriced valuations across global markets. For traditional investment strategies, this environment has posed considerable challenges. However, for savvy investors with longer time horizons, it has presented an opportunity to capitalize on market inefficiencies and access high-quality real estate assets at potentially discounted valuations.

Macro context and market outlook

Real estate markets are rebounding from a two-year correction, with valuations in core regions such as the U.S., Europe and Asia Pacific down 16% to 25%. This repricing creates a tactical entry point for investors to acquire high-quality assets at rebased valuations, supported by ongoing interest rate cuts.

Chart 1: Capital value declines in core real estate offer a tactical entry point

Global markets face ongoing uncertainty from the potential fallout from anticipated U.S. trade tariffs on export-driven economies, political instability in Germany and France, as well as unresolved geopolitical tensions in Ukraine and the Middle East. These factors pose inflationary risks that central banks must balance carefully in their monetary policy decisions. Against this backdrop, traditional reliance on cap rate compression and low interest rates is no longer viable to drive investment returns. Instead, investors should embrace strategies that focus on operational strength, income generation and resilience.

Our global portfolio managers favor four investing approaches as highly effective tools for capturing value and mitigating risks. These strategies provide access to our high-conviction sectors—notably, residential and logistics—which are supported by long-term secular drivers: demographics, digitalization, decarbonization and deglobalization. These strategies enable bespoke transaction opportunities that align closely with priorities for income generation and portfolio resilience, while also allowing investors to potentially capitalize on market inefficiencies and illiquidity to secure discounted entry points into high-quality assets in sectors poised for growth.

1. Global indirect core investing

Our global indirect aggregation strategies involve acquiring operationally intensive assets in resilient sectors to build large-scale, income-generating portfolios. These strategies leverage repriced valuations and partnerships with operating partners who maximize income growth and efficiency rather than direct ownership and operation. This approach allows access for a broader group of investors to high-barrier-to-entry assets. Within this strategy framework, two opportunities standout:

a. Residential beyond multifamily

Purpose-built student accommodation (PBSA) in Europe’s undersupplied university cities addresses acute supply-demand imbalances, offering exposure to a market with strong long-term growth potential is an example of residential beyond multifamily. Historically, PBSA investments focused on well-established markets like the U.S., U.K. and Australia, leaving less mature European markets untapped despite persistent undersupply compared to more developed markets.

We favor a pan-European PBSA portfolio that takes advantage of both the shortages and rising international student demand. Cities like Amsterdam, Madrid, Bologna and Florence exemplify this undersupply, where limited new developments and growing student numbers create compelling opportunities. Our strategy focuses on aggregating PBSA assets in these high-growth markets to create income-resilient portfolios. By partnering with experienced operators who possess proven regional expertise, we ensure effective execution and long-term income growth. Leveraging local operators allows us to capitalize on opportunities where demand consistently outpaces supply.

Execution is central to this strategy. Our platform employs a range of strategies—including investment via programmatic joint ventures, funds, co-investments and clubs—to efficiently acquire and aggregate individual assets. By combining our global scale with best-in-class operating partners, we establish significant barriers to entry to replicate our strategy while driving superior operational performance and sustained income growth. The PBSA strategy also exemplifies our broader focus on sectors driven by structural tailwinds. By targeting underserved European cities, we align with trends to create durable portfolios that deliver robust risk-adjusted returns.

b. Retail is re-emerging

U.S. grocery-anchored neighborhood retail, for example, is becoming a resilient investment opportunity, driven by stable demand for essential goods and the ongoing repricing of retail assets. By focusing on essential goods, retail centers anchored by grocery stores are consistent with shifting consumer behavior, while providing some income defensiveness during periods of economic uncertainty.

Retail has struggled with e-commerce and changing consumer preferences, but grocery-anchored centers remain durable, especially in community-focused residential areas with steady foot traffic. The fragmented U.S. market presents significant opportunities to assemble a granular grocery-anchored retail portfolio. Executing this strategy involves navigating the complexities of a granular aggregation approach, as grocery-anchored assets are dispersed and operationally intensive. Partnerships with best-in-class operators help create effective scaling and tenant management.

2. Global secondaries investing

Secondaries investing enables access to high-quality real estate assets at potentially discounted valuations, providing bespoke capital solutions to motivated sellers. It is particularly effective during periods of dislocation and illiquidity. In today’s environment, compelling opportunities exist across General Partner (GP)-led and Limited Partner (LP)-led transactions.

a. GP-led Transactions for high-quality real estate

GP-led transactions recapitalize existing real estate portfolios while retaining in-place operating partners. This approach is particularly suited to the current cycle, where constrained liquidity and capital shortages have created motivated sellers.

These deals offer investors access to rarely traded, high-quality assets, including trophy assets, through exclusive bilateral negotiations, which aim to minimize price competition and enhance execution certainty. Partnerships with trusted owners enhance transparency into operations and performance, aiding informed decision-making.

GP-led transactions also offer shorter durations and in-place cash flows, making them particularly attractive for investors seeking income resilience and capital preservation. By leveraging strong relationships with trusted operators, we collaborate in seeking high-quality assets in favored sectors, prioritize opportunities with operational stability and growth potential and secure enhanced governance provisions for greater portfolio control. Investors are actively exploring GP-led opportunities to recapitalize portfolios of modern logistics assets, which benefit from digitalization-driven demand for warehousing and distribution centers.

b. LP-led transactions: Opportunities in volatile markets

Prolonged market volatility and constrained distributions have driven a wave of LP-led secondaries transactions. Liquidity-constrained LPs are increasingly motivated to sell fund interests at significant discounts—often between 15% and 30% relative to trough valuations. This creates opportunities to acquire high-quality fund positions in sectors like residential and logistics.

Our approach focuses on shorter-duration, moderately leveraged positions with in-place cash flows. By investing in institutional-quality markets with deep pools of buyers, we aim to mitigate tail risks and ensure liquidity on exit. LP-led transactions offer a strategic pathway for investors to capitalize on liquidity-driven dislocations, securing high-quality assets at scale and assembling portfolios positioned for long-term resilience and growth.

Conclusion

The current market environment offers a potential rare window for investors to reposition and build portfolios resilient to volatility and aligned with high-conviction sectors. We believe bespoke indirect and secondaries strategies provide a unique opportunity to capture value, mitigate risks and leverage maturing secular tailwinds. The focus is not merely on navigating uncertainty but on capitalizing on dislocations to secure assets poised for growth. These strategies could offer a pathway to seize the moment.