Global Market Review
Overall, the global real estate market in the third quarter of 2025 shows mixed but generally positive trends, with regional nuances. Global real estate investment trusts (REITs) returned just over 4% for the third quarter of 2025. The U.S. market benefits from favorable valuations and improving fundamentals; Europe faces headwinds but has selective opportunities; and Asia Pacific leads, with strong performance supported by monetary easing and structural growth sectors. Key growth sectors across regions are data centers, senior housing, retail and residential properties, whereas office- and industrials-sector fundamentals remain mixed. Economic factors such as employment growth, interest rates and geopolitical risks continue to shape market outlooks. However, as earnings season approaches, we expect REIT returns to be more correlated with earnings.
Tariff issues with the United States have settled, but trade disruption remains a downside risk—especially for Europe. Inflation is controlled in the eurozone, but political risks persist. Employment risks in the United States are increasing, influencing monetary policy expectations globally, which in turn affects real estate market sentiment. A declining interest rate environment, slower economic growth, recovering real estate capital markets and limited supply additions should provide a good backdrop for REIT returns on relative and nominal bases—especially given stretched valuations in general equity markets.
