February 2025
How would you describe the 2024 real estate year?
The real estate sector in 2024 demonstrated remarkable resilience amid a backdrop of global challenges that tested its adaptability. Geopolitical instability, including conflicts in Europe and the Middle East, created ongoing macroeconomic uncertainty, disrupting supply chains and investor confidence. Simultaneously, the persistence of high inflation and elevated interest rates placed significant pressure on capital flows, leading to recalibrations in asset valuations.
Despite these headwinds, the incomegenerating attributes of real estate proved indispensable for institutional portfolios, though performance outcomes varied considerably across asset classes and geographies.
Real estate’s income-based nature proved particularly robust during the year. However, success was not evenly distributed, with performance highly dependent on sectoral and geographic considerations. The logistics and living sectors, supported by enduring structural imbalances between supply and demand, outperformed.
Private real estate debt also presented compelling opportunities as traditional lending patterns shifted.
Meanwhile, sustainability emerged as a cornerstone of investment strategies, with resilient, low-carbon assets offering a blend of financial stability and environmental benefits that resonated with investor priorities.
Reflecting on 2024, it is evident that adaptability, specialisation, and a focus on long-term resilience were pivotal to weathering the challenges of the year. These insights will continue to guide the sector as it approaches the opportunities and obstacles of 2025.
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“This environment demands cautious and informed investment decisions, underscoring the importance of risk management.”