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Real Es­tate Stra­tegic Out­looks: Mid-Year 2026

Alternatives
Real Estate

10/6/2026

The Real Estate Strategic Outlooks reflect the DWS Real Estate Research team's opinions of the various aspects of Real Estate markets across the United States, Europe, and Asia Pacific. This information represents our theoretical views on Real Estate markets globally and do not intend to comment on any DWS products or strategies or serve as investment advice, a recommendation, an offer or solicitation.

Kevin White, CFA

Global Co-Head of Real Estate Research

simon wallace headshost

Simon Wallace

Global Co-Head of Real Estate Research and Head of Real Estate, UK

Koichiro_Obu_headshot

Koichiro (Ko) Obu

Head of Real Estate Research, Asia Pacific

Real Es­tate 2040: Bey­ond the Core

United States


U.S. commercial real estate has continued to show steady performance into 2026, supported by stable economic growth and relatively consistent interest rate conditions. Market activity reflects a continuation of the recovery phase following earlier market adjustments.

A notable shift is the improving balance between demand and supply. Demand across sectors is recovering from post-pandemic distortions, while new development has slowed significantly. This combination is reducing the pipeline of new supply and influencing overall market availability.

Sector trends remain varied. Retail has shown relatively stable fundamentals, residential markets are gradually tightening, and industrial activity is stabilising after recent moderation. Office markets are improving more gradually, with differences across locations and asset quality.

Europe


European real estate entered 2026 experiencing accelerating recovery, and while investment activity has slowed in response to geopolitical developments, this reflects a temporary pause in sentiment rather than a change in underlying market drivers.

A central theme across the region is limited new supply. Development activity has declined as rising construction costs and higher required rents reduce the economic viability of new projects. At the same time, demand continues to be supported by major structural trends from urban migration to fiscal stimulus, the resumption of e-commerce growth to the proliferation of AI.

Performance varies across sectors and locations. Residential markets continue to reflect major supply shortages, logistics is supported by ongoing shifts in distribution networks, and office demand is increasingly focused on central, high-quality assets. Retail recovery remains uneven, depending on format and local market conditions.

 

Asia Pacific


Asia Pacific real estate markets in 2026 are shaped by a more mixed macroeconomic environment, including rising inflation and tighter monetary conditions. External factors, such as energy prices, continue to influence regional trends and investor sentiment, however underlying fundamentals across both North Asia and Australia remain strong.

The market is increasingly defined by supply-side constraints. Higher construction costs and reduced development feasibility are slowing new project deliveries, supporting occupancy levels and rapid rent growth across many sectors.

Market dynamics differ across sectors. Logistics and residential markets are supported by structural demand drivers such as e-commerce and urbanisation, while office markets show resilience in prime locations. Retail conditions remain linked to consumer spending trends and inflation pressures.

 

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Al­tern­at­ives Re­search

Real Es­tate Re­search

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