JLL’s Global Real Estate Forecast for 2025: Key Trends and Investment Insights

The international consulting firm JLL has released its 2025 real estate market forecast, covering all major sectors: residential, commercial, industrial, retail, and hospitality. The study provides insights into real estate investments and market dynamics across the US, Europe, and the Asia-Pacific region.

Residential Real Estate: A Strong Investment Sector

Despite global economic and geopolitical uncertainties, housing continues to drive overall real estate investments. 2024 ended with strong market activity in the US, EMEA, and Asia-Pacific, with each region surpassing 2023 transaction volumes.

US market: Annual housing transactions reached $127 billion, reflecting an 11% growth year-over-year.
Europe (EMEA): Total transactions amounted to €44 billion, up 14% compared to 2023.
Asia-Pacific: The total investment volume exceeded $7 billion, marking a 5% increase.

Short-Term Outlook:
Investment in residential real estate is expected to grow throughout 2025, despite geopolitical instability. Europe remains strong, while the US market is expected to improve as new housing supply declines.

Long-Term Outlook:
The build-to-rent sector will continue to expand, particularly in Australia, Japan, the UK, and France. Meanwhile, established markets such as the US, Canada, and Germany will see further investment diversification across all types of residential properties.

Hospitality Real Estate: A Sector of Resilience

The global hotel industry proved to be resilient despite economic challenges. By November 2024, global demand reached 4.8 billion room nights, 102 million more than in 2023.

Key Performance Indicators:

RevPAR (Revenue Per Available Room) increased by 3.7%.
Urban hotel demand surged, while resort markets stabilized.
The Americas set a new record, while Asia-Pacific continued to recover.

Short-Term Outlook:
Investment is expected to shift towards high-barrier urban markets, driven by high construction costs and limited supply.

Long-Term Outlook:
As work, life, and travel merge, hotel brands will expand into new market segments, embracing innovative lodging concepts and branded residences.

Commercial Real Estate: Evolving Demand for Office Spaces

Office leasing activity rebounded globally, with a 10% increase in Q4 2024, marking the highest yearly total since 2019.

US: Office demand soared 18% above 2023 levels.
Asia-Pacific: The market expanded by 5%, while Europe remained stable.
Vacancy rates hit 16.8% globally, rising in North America and Europe but declining in Asia-Pacific.

Short-Term Outlook:
Companies are increasing return-to-office mandates, boosting office space demand worldwide.

Long-Term Outlook:
A shift towards premium office spaces will continue, driven by sustainability, hybrid work models, and evolving business needs.

Industrial Real Estate: A Market Poised for Growth

Industrial leasing remained stable in 2024, but slowed investment activity was seen globally as tenants optimized space usage due to high costs and market uncertainty.

North America: Leasing volumes dropped 27% YoY.
Europe: Quarterly volumes rose 19%, yet yearly activity declined 5%.
Asia-Pacific: Leasing activity slowed 13%, reflecting market adjustments.

Short-Term Outlook:
Leasing demand is expected to stabilize or rise in 2025, supported by e-commerce growth and modern logistics hubs.

Long-Term Outlook:
Industrial real estate will remain a high-potential sector, with demand for logistics, warehouses, and supply chain optimization ensuring long-term stability.

Retail Real Estate: Navigating a Transforming Market

Retail property demand remained stable in 2024, even as consumer sentiment weakened. The 2025 outlook is positive, driven by rising household spending and tourism recovery.

Prime retail locations in Europe and North America saw high tenant demand.
Asia-Pacific retail remained strong, fueled by growing tourism markets.
Retail bankruptcies increased, yet vacant spaces were quickly reoccupied.

Short-Term Outlook:
Major luxury, fashion, F&B, and entertainment brands will continue to expand.

Long-Term Outlook:
Retailers will integrate new technologies to enhance consumer experiences, including smart stores, AI-driven personalization, and experiential shopping.

Real Estate Investment Trends: Strong Rebound in Q4 2024

Global real estate transactions surged 37% YoY in Q4 2024, reaching $232 billion, with full-year investment volumes up 14% at $703 billion.

- Americas: Q4 investment grew 45% YoY, totaling $372 billion.
- EMEA: Q4 activity surged 40% YoY, reaching $199 billion.
- Asia-Pacific: Q4 investments rose 10%, with annual growth of 23% at $131 billion.

Investment Trends for 2025:

Industrial, logistics, and residential sectors remain the top investment choices.
Retail is stabilizing, while the office sector is gaining investor confidence.
Diverse portfolios and high-quality assets will dominate institutional investment strategies.

2025 Real Estate Market Outlook

Despite ongoing economic and geopolitical risks, the global real estate sector is positioned for continued growth. Key market drivers include: ✔️ Low unemployment & wage growth
- Limited new supply in key markets
- Investor focus on high-quality assets
- Innovation in hospitality, retail & logistics

While challenges remain, real estate investments and market fundamentals are expected to strengthen in 2025, driven by supply-demand imbalances and evolving global economic conditions.