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2025 Real Estate Strategic Outlooks

12/17/2024

We are pleased to share with you our latest set of Real Estate Strategic Outlooks for 2025. These reports provide our assessment of regional and national real estate markets for the United States, Europe and Asia Pacific markets, as well as our investment perspectives.

Kevin White

Head of Research, Real Estate, Americas, DWS

Simon Wallace

Global Co-Head of Real Estate Research

Koichiro_Obu_headshot

Koichiro (Ko) Obu

Head of Real Estate Research, Asia Pacific

real-estate-strategic-outlooks

United States

In a nutshell

  • U.S. real estate turned a corner in 2024 as prices stabilized and fundamentals strengthened.[1]
  • The November 2024 election sparked debate about its implications for real estate. We believe that the impact will be modest, contingent on the scope and timing of prospective policy changes.
  • Assuming a stable macroeconomic environment, we believe that real estate is positioned to perform well, underpinned by solid income returns and robust rental growth.
  • We favor sectors and geographies supported by structural drivers. In general, these include industrial, residential, and retail properties, and markets in the Sun Belt and Mountain West.

Europe

In a nutshell

  • Promising new chapter for European real estate as we expect limited new supply, strong rent growth and yield compression over the next five years. However, focus on real estate fundamentals more important than ever.
  • Our investment strategies and market calls prioritise supply-constrained markets, with a focus on logistics and residential, where the limited availability of space and a constrained supply outlook could help sustain rental growth.
  • Compelling value-add opportunities in the living sector, capitalising on a rare convergence of improving fundamentals, pricing dislocation, new living solutions, and technology-driven operational efficiencies.
  • Niche real estate sectors – such as data centres, senior living and healthcare – appear poised for growth, driven by demographic shifts, technological advancements, and evolving market demands
  • Read our national reports covering France, Germany, Iberia, Italy, Netherlands, Nordics, Poland, and United Kingdom for more in-depth insights.

Asia Pacific

In a nutshell

  • Following a multi-year asset repricing, we see a potential upward cycle within the next 12 months with real estate valuations in Asia Pacific approaching attractive levels, driven by healthy fundamentals and easing monetary conditions.
  • With occupier demand expected to remain resilient, the spotlight could shift to supply constraints arising from surging construction costs, particularly in the cost sensitive logistics sector.
  • Prime Logistics in locations facing future supply constraints such as Greater Tokyo, Seoul and Australia, Living assets in Australia and Japan, and repriced Next-Generation Offices in Sydney and Seoul form our top picks for the core investment opportunities across the region.
  • Read our national reports covering Australia, India, Japan, and South Korea for more in-depth insights