Research suggests stronger real estate investment activity in 2025
Nearly three-quarters of Savills researchers from around the world are expecting investment activity in their markets to improve next year, with a similar proportion also anticipating a recovery in capital values.
Savills has already forecast global real estate investment turnover to rise 27% to $952bn in 2025 and surpass the $1tr mark by 2026. In its annual survey of its 33 heads of research, it found an increase in positivity towards transaction activity in all sectors in the next 12 months.
Savills researchers are most optimistic about prime offices: 81% anticipate rental growth in the sector, with 91% forecasting rising levels of leasing activity. Rental growth expectations for 2025 are strongest in Saudi Arabia, the UAE, India, the UK, and Spain. Savills has also grown more positive on secondary offices: with the repricing in these asset values having largely run its course, the international real estate advisor says secondary offices are now likely to attract value add and opportunistic investors. While the market will remain challenging, Savills researchers foresee modest rises in rents and take-up for secondary offices in the Middle East, India, Japan, South Korea, Denmark and Switzerland.
Savills anticipates that investors will continue to embrace ‘beds and sheds,’ given they are supported by ongoing structural demographic and technological trends, and geoeconomic fragmentation. Industrial and logistics has also been highlighted by many markets as a top 2025 pick for investors with core strategies, with the various living sectors also prominent choices in more mature, liquid markets.
According to Savills, improved retail performance is probable in 2025, with buoyed consumer confidence and an uptick of retail sales volumes forecast. Over two thirds of Savills researchers anticipate rental growth and increases in retail take-up, although it says investors are likely to continue to be selective when deploying into what is a relatively diverse and fast-changing sector, which often favours those with a higher risk-return profile.
In terms of geographies, Savills says it is expecting a stronger recovery in capital markets activity in advanced economies that have seen more resilience in take-up and rents, which should be further supported by interest rate shifts next year. By contrast, in markets such as India, the occupational backdrop remains a key driver of attracting investors both willing and able to enter these relatively immature but fast-growing markets, underpinned by strong economic growth and significant catch-up potential. Savills positive outlook is not ubiquitous across all markets: in Hong Kong and mainland China, structural challenges to growth and oversupply concerns are likely to continue to weigh on both occupational and investment activity in 2025.
Paul Tostevin, head of Savills World Research, comments: “After a chastening few years, the tide is turning. The cyclical factors weighing on property values and investment activity are beginning to recede, and the nascent recovery in real estate capital markets should gather momentum in 2025. According to our experts in 33 countries, however, economic performance, will remain top of mind across all property sub-sectors and regions in 2025, followed by demographic forces, given they have such an impact on how people live and work and ultimately drive real estate requirements. Environmental factors are the next most important theme for next year, given the pressing need to decarbonise real estate continues, and the increasingly visible impact of climate change during 2024.”
Savills research full top investment picks for 2025, depending on investor strategy:
Country | Core | Value-add | Opportunistic |
Australia | Residential, stabilised industrial assets, premium office. | Industrial (secondary in core and last mile), secondary residential, secondary office. | Industrial, data centre, land banking, infill sites, residential, retail with mixed use upside. |
China | Multifamily in tier-1 cities, logistics in South China. | Life science in tier-1 cities, business parks in tier-1 cities, prime retail in tier-1 cities. | Distressed office and retail outlets in tier-1 cities, distressed logistics in tier-1 and neighbouring cities. |
Egypt | Prime office in East Cairo, Grade A residential development in new urban communities, entertainment-anchored retail. | Mixed use development in upcoming areas around existing new urban communities. | Hospitality and adaptive reuse in central Cairo, mixed use developments in secondary governorates. |
Finland | Residential, office and logistics in the city of Tampere. | Helsinki Metro office, either in a good location with the possibility to refurbish, or a prime asset in a secondary location, affordable housing. | Change of use office to residential conversions in major markets. |
France | Industrial and logistics, office in Paris CBD and other main cities, hotels, student and senior living. | Office in the Paris region and other regional cities, hotels, residential development via change of use. | Office, retail, industrial. |
Germany | Multifamily in growing regions, food-anchored retail, prime logistics in the top 10 regions. | Secondary shopping-centres, multifamily assets with manage-to-green potential, secondary offices in prime locations. | Non-ESG-eligible residential, development for offices and multifamily. |
Hong Kong | Logistics, retail. | Hotels and prime high-street retail. | Co-living and student. |
India | Grade-A office, logistics in tier-1 locations. | Office, logistics in smaller locations, residential. | Integrated developments, including industrial, shopping centres and other retail, and residential. |
Indonesia | Hotels, retail, industrial and logistics. | Retail, hotel, residential. | Retail, hotels, office. |
Ireland | Living sector assets, prime office in core CBD locations, retail on Grafton Street. | Retail (excluding Grafton Street). | Non-core CBD office with capex/leasing uncertainty, older industrial assets located close to the city centre. |
Italy | Office in Milan, high street retail in Milan and Rome, logistics in the north of Italy. | Hospitality, build-to-rent in Milan, student across universities cities. | Shopping centres, hospitality, supermarkets. |
Japan | Large mixed-use office, prime retail, multifamily. | Grade B office, logistics with higher vacancy, older multifamily assets. | Corporate real estate, luxury development, office with high vacancy. |
Malaysia | Logistics in Greater KL, Iskandar Malaysia, and Penang, data centre development in Greater KL and Iskandar Malaysia, office in KL CBD. | Office in Greater KL, retail malls in Greater KL and Iskandar Malaysia, hotels in Greater KL, Iskandar Malaysia, Penang and other major cities. | Commercial buildings in suburbs, including offices and supermarkets. |
Netherlands | Logistics, hotels, well-located prime office. | Secondary logistics and light industrial assets, prime retail (with potential for alternative use such as creating residential in upper floors). | Retail in key regional cities, lower quality offices near public transport hubs. |
Norway | CBD office, hotels, offices in the western fringe of Oslo. | Central Oslo income-producing office, secondary office with change of use potential to convert to hotels. | Failing Special Purpose Vehicles (SPVs) with long weighted average unexpired leaser term (WAULT) properties, distressed residential plots. |
Poland | Senior living, prime office, retail parks with limited local competition. | Student, logistics with short WAULT, secondary office. | Residential, Old logistics and office in attractive locations, office in regional markets. |
Portugal | Hospitality in Lisbon, Porto, and the Algarve, office in Lisbon and Porto, student and senior living. | Office in secondary locations, hospitality, logistics. | |
Romania | Prime office in Bucharest, Cluj-Napoca, and Iași, prime industrial in Bucharest and the west/north west region of Romania. | Old hotels and historical properties suitable for reconversion in mountainous locations, secondary office located in key areas of Bucharest (e.g., close to subway stations). | Listed/heritage or historical residential buildings in central Bucharest, industrial assets in eastern Romania. |
Saudi Arabia | High-end residential development in Riyadh, Grade-A office in Jeddah, retail in Dammam. | Mid-tier residential in Emerging Riyadh Districts, hospitality in Makkah and Medina, industrial in Dammam Industrial City. | Mixed-use projects in NEOM, luxury hospitality on the Red Sea Coast, tech-focused commercial real estate in Riyadh. |
Singapore | Suburban retail and ramp-up logistics. | Conservation shophouses (preserved historical buildings), development in secondary locations. | Private residential development in the mass market non-landed housing segment. |
South Korea | Residential and office. | Dry logistics and hotels. | Logistics (cold storage) and data centre development. |
Spain | Logistics, living sector, retail (shopping centres, retail warehousing, supermarkets). | Offices in Madrid with a change of use potential, mainly to residential or hotel. | |
Switzerland | Prime residential in Zurich and Geneva, prime office in Zurich CBD, Basel, and Geneva, industrial and logistics on the main national highway. | Secondary residential secondary office, prime retail in mid-sized cities. | Residential development in peripheral locations, secondary office in mid-sized cities and western Switzerland. |
Taiwan | Prime office and industrial sectors, technology-anchored assets in secondary locations. | Refurbishment of logistics. | Redevelopment of older buildings, including hotels in secondary locations, into residential. |
Thailand | Prime office in Bangkok CBD, Luxury residential in Bangkok (e.g., Sukhumvit, Silom, and Thonglor), and prime retail in central Bangkok. | Mixed-use development in emerging areas, refurbishing mid-tier retail centres in suburban Bangkok, mid-market residential in outer Bangkok (e.g., Ladprao, Ratchada). | Industrial and logistics parks in the Eastern Economic Corridor (EEC), hotels in tourist hubs (e.g., Pattaya, Phuket, Chiang Mai), affordable co-working spaces in Bangkok non-CBD areas. |
UAE | Secondary office in downtown Dubai, Secondary residential in the Dubai Hills. | Secondary residential in Dubai Discovery Gardens and Arjan. | Primary residential in Ras Al Khaimah, secondary residential and office in Dubai Silicon Oasis. |
UK | Prime CBD office and logistics, dominant shopping malls, retail warehousing. | Low cost brown-to-green office opportunities, regional office development. | City of London offices, regional offices. |
USA | Prime industrial and logistics in supply-constrained markets, prime multifamily in supply-constrained markets, data centres. | Class B multifamily, Class B industrial and logistics and outdoor storage, self storage properties in supply-constrained markets. | Distressed office in supply-constrained markets, distressed multifamily in markets with strong population growth, distressed shopping centres in supply-constrained markets. |
Vietnam | Education, medical, and Finance, Insurance, and Real Estate (FIRE) sectors. | Decentralised office, infrastructure repositioning. | Senior care, industrial conversion, agriculture/food. |
