Global real estate poised for measured recovery

The global commercial real estate sector, following years of volatility, is now stabilising and poised for a steady, albeit measured, recovery in 2026. 

Hines 2026 Global Outlook

According to Hines’s 2026 Global Investment Outlook, this recovery will unfold unevenly, requiring investors to remain agile and strategic.
Unlike the rapid rebounds of the past, this recovery will be gradual and localised. Investors will need precision to identify and capitalise on emerging opportunities.
Traditional property boundaries are dissolving as living, working, logistics, mobility, and technology merge. Integrated platforms that support modern economic behaviour—such as multifamily, industrial, mixed-use, and specialised infrastructure like data centres—are becoming essential.
Geopolitical factors, shifting regulations, and a renewed focus on proximity are making capital flows more localised. Success will depend on a deep understanding of hyperlocal market dynamics.
The living sector remains a cornerstone of investment, while interest in office spaces is beginning to renew. Simultaneously, the convergence of infrastructure and real estate is creating fresh demand, particularly within the industrial sector.
Living    is expected to remain resilient, especially in developed economies. Global housing shortages and affordability challenges continue to drive strong rental demand.
In the Industrial sector, new demand corridors are emerging from increased intra-regional trade. The sector is increasingly overlapping with retail and data centres, signalling future growth.
Having largely "rightsized," the Retail sector has shown strong performance in the U.S. recently; however, potential tariffs introduce an element of uncertainty.
In the Alternatives sector, the rise of AI is fuelling demand for data centres, particularly "powered land" opportunities. Europe’s less saturated market and Purpose-Built Student Accommodation (PBSA) remain key areas of focus.
Europe is returning to a low-growth, low-inflation, and low-rate environment, providing the ECB with greater flexibility for rate cuts. While transaction volumes have recently stalled, attractive pricing, lower swap rates, and tighter credit spreads could reignite capital flows. Furthermore, any depreciation of the USD against the EUR could enhance returns for American investors.
Evidence suggests the market bottomed out in 2025. Values are already rising in Europe and Asia, with a U.S. recovery expected shortly.
Moderate demand is currently outpacing limited supply, which should support consistent rent growth.
Future returns are likely to be driven by income growth rather than cap rate compression. This environment favours experienced managers capable of increasing property income within a competitive supply landscape.