The message from today’s ULI/PwC Emerging Trends in Real Estate® Global Outlook 2025 launch at MIPIM was clear: geopolitical instability and fragile economic growth continue to cast uncertainty over the real estate industry.

Presented by Gareth Lewis, Director at PwC, the session outlined the key findings of this year’s report, which explores the global challenges and opportunities facing real estate. Based on insights from thousands of industry leaders across Europe, North America, and Asia Pacific, it provides a comprehensive outlook on investment and development prospects for the year ahead.

The report anticipates another year of economic uncertainty, with inflationary pressures and geopolitical instability contributing to ongoing market fragility. Stubbornly high interest rates in some regions may delay the expected recovery in capital markets and occupancy levels. However, historically low levels of global real estate capital flows could present potential for a rebound, offering a degree of cautious optimism for investors and developers.

Regional variations in market sentiment highlight distinct concerns across different parts of the world. In North America, the dominant issues are the cost of capital and housing availability, while in Europe, international political instability and the risk of escalating conflicts are shaping industry confidence. In Asia Pacific, the focus remains on low yields and rising interest rates, illustrating the diverse set of challenges the industry is facing globally.

The conversation around sustainability and ESG is also evolving. ESG, once broadly embraced, is becoming an increasingly politicised topic, with investors now looking for clearer returns on sustainability initiatives. The industry must not only meet environmental targets but also demonstrate the financial upside of resilience and decarbonisation strategies. Climate risks, particularly from extreme weather, are becoming a more urgent consideration in investment decisions, further reinforcing the need for long-term sustainability planning.

Despite these pressures, the report also points to areas of opportunity. Success in 2025 will depend on an ability to navigate political risk, maintain a strong focus on return on investment for ESG initiatives, enhance operational expertise, and deploy effective diversification strategies. The greatest investment potential for the global real estate sector is emerging at the intersection of real estate and infrastructure, shaped by megatrends such as urbanisation, digitalisation, and climate change.

Growth drivers such as data centres and new energy infrastructure are becoming increasingly important, reflecting the rapid integration of data across all aspects of the economy, business, and society. Rising demand for data storage and processing power, along with the transition to net zero and the growing need for energy security, is shaping investment priorities in these sectors.

This sentiment was echoed in a keynote address later at MIPIM by Dr. Mario Draghi, former President of the European Central Bank and Italian Prime Minister, who presented his vision for “The Future of European Competitiveness.” His roadmap for Europe’s economic revitalisation calls for large-scale investments and policy reform, reinforcing the themes outlined in this year’s Emerging Trends report – particularly the opportunities within infrastructure, urban development, and sustainability.

However, barriers to growth remain. The challenges associated with these investment opportunities include the intensive use of environmental resources such as energy and water, complex regulatory landscapes, a lack of investment capital, shortages of specialist knowledge, and limited availability of suitable assets. Addressing these constraints will be key to unlocking the full potential of infrastructure-aligned real estate investment.

The presentation concluded with an expert panel which was moderated by Olafur Margeirsson, Head of Real Estate Research & Strategy at UBS Asset Management. Olafur opened the discussion by asking the panellists about their reflections on the current state of the market and outlook for the year ahead.

Lisette van Doorn, CEO of ULI Europe, opened the panel by reflecting that the industry faces a complex year ahead. She said uncertainty has grown again, and while real estate is poised and ready to go there continues to be a split between a degree of cautious optimism and cautious pessimism for the investment and development outlook.

Raimondo Amabile Co-Chief Executive Officer and Global Chief Investment Officer at PGIM Real Estate Real estate commented that he is currently taking the optimistic side of the equation, explaining that the fundamentals for real estate remain strong, with the focus on how to underwrite rental growth.

Abigail Dean, Global Head of Strategic Insights at Nuveen went on to say that real estate needs to work harder to compete against asset classes and shift course more quickly than it has in the past. David Steinbach, Global Chief Investment Officer at Hines, discussed how the sector needs to think more carefully about storytelling and outlining the elements of value creation that it provides for society.

Their discussion reinforced the importance of adaptability, the role of infrastructure-led investment strategies, and the growing intersection between sustainability and financial performance in shaping the future of real estate.

The discussion at MIPIM provided a snapshot of the key themes shaping global real estate in 2025, but the conversation does not end here. Over the coming weeks, ULI will be sharing fuller and more in-depth analysis of the Emerging Trends in Real Estate® Global Outlook 2025, including insights from industry leaders, deep dives into regional trends, and expert perspectives on the challenges and opportunities ahead.

Stay tuned for further updates as we continue to explore what’s next for the industry.

Click to download this year’s Emerging Trends in Real Estate® Global Outlook from ULI Knowledge Finder: