Seven commercial real estate investment trends from 2025

Victoria Ormond, Head of Capital Markets Research

It’s easy to assume politics, tax and regulatory changes dominate CRE investment decisions, but the results of our latest Active Capital Survey reveal this isn’t the case.

At the top of the list is interest rates. Even with rates easing, unlevered private capital holds a structural advantage. It’s important to go back to the fundamentals because there are likely opportunities in contrarian investing.

Ben Burston, Chief Economist, Australia

The rise of online shopping platforms has tarnished the lustre of retail property assets, but it appears the doom merchants spoke too soon.

Last year, retail was the strongest-performing CRE asset class in Australia. Reasons for the bounceback include a decline in retail space per person, which led to rising turnover in existing centres. The lesson for investors in 2026 is to question the herd mentality and seek opportunities where others may fear to tread.

Faisal Durrani, Head of Research, Middle East and Africa

Geopolitical risks aside, the UAE has begun to attract global institutional capital interest in a way we haven’t seen before.

Most are focusing on industrial and logistics assets, driven by the shortage of supply in commercial centres Abu Dhabi and Dubai. Build-to-rent residential is also high on the agenda, following several years of stellar house price growth.

Lee Elliott, Global Head of Occupier Research

The workstyle pendulum has swung decisively back towards the office.

2025’s (Y)OUR SPACE, Knight Frank’s global survey of corporate occupiers, shows hybrid workstyles stabilising, while office-first models are gaining momentum. This model is expected to see strong growth over the next three years. “Death of the office” has proved overstated; instead, CRE strategy is recalibrating around renewed, purposeful office use.

Christine Li, Head of Research, Asia-Pacific

In 2025, HNWI cross-border investment in Asia-Pacific CRE surged to its highest level since 2019.

This renewed appetite is fuelled by attractive valuations and a generational shift. The focus is shifting from passive, trophy acquisitions to active, value-add strategies. This creates a dual opportunity in 2026: a pool of returning cross-border capital, alongside a sophisticated and growing domestic investor base seeking direct deals, especially in resurgent core markets like Singapore and Hong Kong.

Judith Fischer, Partner, European Commercial Insight

In Europe, offices and big-ticket deals are making a comeback.

After a few tough years for the European office market, 2025 saw a rebound and the trend looks set to continue in 2026, with offices the most targeted sector by respondents to our Active Capital Survey. Investors are likely to focus on prime, ESG-compliant assets in core CBDs, where there is income resilience.

Vivek Rathi, National Research Director, India

The domestic share of private equity investments has more than doubled post-Covid, reflecting the growing financialisation of Indian CRE.

Domestic capital was further encouraged by India’s strong macroeconomic backdrop, with GDP growth above 7%, easing inflation, and a turning interest rate cycle. Now, as global conditions stabilise and rates begin to ease, global investors have a relatively derisked re-entry opportunity, particularly for those looking to partner locally and participate early in the next phase of the cycle.