EMEA real estate faces repricing – Colliers

The EMEA real estate market will see significant price adjustments as companies change their property needs, according to Colliers' report, "Building Resilience: 5 Megatrends Redefining Corporate Real Estate."

Andrew Hallissey

This is due to five major long-term trends: the rise of AI in the workplace, changing demographics, energy shortages, climate change risks, and a shifting global power dynamic.

These megatrends are causing a mismatch between older property portfolios and what future tenants will want, leading to a widening gap in the value and relevance of different properties and locations. Specifically, energy costs and availability are now crucial for new developments and leases, while stricter ESG standards are making older buildings obsolete faster. Additionally, competition for skilled workers is pushing companies towards locations with strong labour markets and reliable infrastructure.

These factors are creating a more divided market. Robust properties and locations are attracting most of the demand, while less adaptable buildings will see their prices fall more quickly. The report also notes a shift in global economic growth, with emerging markets gaining importance, forcing established business hubs to compete with new locations that offer better costs, talent, and political stability.

In response, real estate investors are moving away from simply buying large volumes of property to making more careful, risk-aware investment choices. Their location decisions are now heavily influenced by factors like energy reliability, infrastructure quality, and access to talent. Asset strategies focus on flexibility, adaptability, and sustainability. Investors are now compelled to re-evaluate their portfolios, test properties against energy, climate, and regulatory risks, and prioritise buildings that can easily adjust to evolving tenant demands. Those who successfully adapt their portfolios to these changes will be better equipped to attract tenants and maintain value, while others will likely see their asset performance diverge significantly in the upcoming market cycle.

Andrew Hallissey, CEO, Global Occupier Services, Colliers, stated: “These megatrends will require businesses to fundamentally reassess how they plan, invest in and operationalise locations and workplaces. As technology reshapes how work gets done, it’s vital to acknowledge the scale of change ahead and present a realistic picture of what the future of real estate and the workplace will look like.”

Damian Harrington, head of Research, Global Capital Markets and EMEA at Colliers, added: “Maintaining a presence in major hubs will continue to matter, but growth is increasingly coming from a wider range of locations. The places that matter tomorrow won’t always be the ones that mattered in the past.”