2025 Global Investor Intentions Survey

Regional investor intentions surveys¹ conducted by CBRE in late 2024 indicate improved sentiment worldwide. Since then, according to our experts on the ground, investor sentiment has remained upbeat despite a likely slower-than-expected pace of interest rate cuts.

We’ve identified common viewpoints in all three regional surveys, as well as areas where investor outlook diverges.

Buying Intentions & Drivers

Although the cost of debt remains higher than expected, a significant majority of investors across all three regions intend to buy more or at least as much real estate as they did in 2024.

Figure 1: Investor Buying Intentions

Favorable pricing was cited by both U.S. and European investors as the top reason to increase their capital allocations to real estate this year, while Asia-Pacific investors cited the potential for lower debt costs.

In the U.S., investors have turned slightly more cautious since the surveys were conducted amid the belief that interest rates may remain higher than previously expected. Despite this, capital continues to gravitate toward real estate, with CBRE observing a steady increase in monthly bidder activity. Continued economic and job growth bode well for real estate fundamentals.

While European investors have also turned slightly more cautious since the surveys were conducted, many are convinced that the market is at the bottom of the cycle or has already passed it and believe that now is the time to become active.

Asia-Pacific investors are more confident that the interest rate cycle has peaked. After a period of slow capital deployment over the past 18 months, investors appear eager to increase their capital allocations to real estate.

This sentiment was even prevalent in Japan, the only country continuing to tighten its monetary policy, as investors expect a continued rise in rents for most property types this year.

Figure 2: Main Reasons for Increasing Allocations to Real Estate

Preferred Investment Strategy

A majority of investors in all three regions selected value-add as their preferred strategy, with core-plus coming in a distant second.

Strong demand for value-add opportunities in the U.S. reflects a growing search for higher returns while minimizing risks and enhancing operational management amid asset repricing and improving market fundamentals. European investors also preferred value-add opportunities despite higher risk.

Japanese investors heavily weighted the preference for value-add opportunities in Asia-Pacific, likely reflecting an expectation of higher interest rates. On a regional basis, however, investors' choice of strategy this year illustrates their markedly optimistic outlook for real estate fundamentals. With core and core-plus prices having corrected, investors are seeing that these opportunities are starting to offer an attractive risk-adjusted proposition, especially relative to opportunistic.

Figure 3: Preferred Investment Strategy

Preferred Investment Sector

Multifamily/residential and industrial & logistics were among the top three most preferred property types across all regions.

The U.S. multifamily market continues to perform well despite robust new supply levels, with high mortgage rates discouraging homebuyers and providing a solid foundation for stable rental markets. Office and retail assets also saw an uptick in U.S. investor interest due to increased leasing activity.

Residential overtook industrial & logistics assets as European investors’ top choice this year, with respondents expressing a strong preference for multifamily/build-to-rent properties. This reflects expectations of rising rents amid growing demand and a shortage of housing supply arising from higher interest rates and construction costs. While forecasts suggest an increase in supply this year, the current development pipeline still falls short of demand.

Industrial & logistics remains the most preferred property type for Asia-Pacific investors this year, even though rental rates are now stabilizing after a period of significant growth. While increasingly popular, multifamily remains at a nascent stage of development in the Asia-Pacific region outside of Japan and Australia. Nevertheless, investors continue to explore opportunities across the full range of residential assets such as student and senior housing.

Figure 4A: Preferred Property Types by U.S. Investors

Figure 4B: Preferred Property Types by European Investors

Figure 4C: Preferred Property Types by Asia-Pacific Investors

Preference for Office Assets

Investor sentiment about the office sector diverged significantly in this year’s regional surveys. No U.S. investors ranked it among their top three preferred sectors, while Europeans ranked it third and Asia-Pacific investors ranked it second. This reflects differences in each region’s office market fundamentals, with vacancy rates at 15% or more in most U.S. cities and around 10% in European cities.

While investors remain relatively cautious about the U.S. office sector, leasing activity in prime office buildings has picked up in major cities, led by Manhattan. There are also signs that the San Francisco and Seattle office markets are bottoming out due to demand by AI-related companies and return-to-office mandates.

In Europe, interest in office assets remains subdued, with those investors who are considering this asset class expressing a strong preference for prime properties. This reflects the ongoing overall trend of tenant consolidations into prime Class A buildings.

After three consecutive years of weaker interest, the appeal of office assets for Asia-Pacific investors picked up slightly in this year’s survey. Despite high vacancy, office investments are becoming more attractive due to the region’s high return-to-office rate, steady leasing demand, asset repricing and improved returns, particularly in large gateway cities in Japan, Australia and Singapore.

Preference for Alternatives

There was little commonality in preferred alternative sectors across the three regions.

U.S. investors remain at the forefront of alternative real estate investments like self-storage and industrial outdoor storage (e.g., for shipping containers, motor vehicles and construction materials), which were not among the preferences of European and Asia-Pacific investors. However, more than half of U.S. investors said they have no interest in pursuing alternative investments this year, most likely because they intend to target repriced assets in the main property sectors.

Propelled by strong AI-related demand, data centers remain keenly sought after by European investors, who ranked the sector second after student living. Asia-Pacific investors also appear to have strong interest in data centers, ranking it second after health-care related assets, due to the rise of the digital economy. In the U.S. survey, data centers were included among mainstream rather than alternative assets and were sixth most preferred.

Among U.S. investors, elevated and volatile long-term interest rates were cited as the biggest challenge to investment this year.

European and Asia-Pacific investors expressed stronger concern about geopolitical risk, no doubt influenced by the Russia-Ukraine war, conflicts in the Middle East and the potential for an escalated territorial dispute between mainland China and Taiwan.

In addition to monetary policy and geopolitical risk, other challenges in 2025 include potential tariffs’ impact on global real estate markets.

Figure 5: Top Challenges to Real Estate Investment

While CBRE expects a continued recovery for U.S. investment sales in 2025, investors and lenders will face several headwinds. The 10-year U.S. Treasury yield likely will remain above 4% as markets react to a persistently large budget deficit, stimulative fiscal policy and the potential for higher inflation. Nevertheless, strong economic growth driving positive fundamentals will support the recovery in investment activity, with investment volume forecast to increase by 8% in 2025.

In Europe, commercial real estate investment activity is expected to increase as buyer and seller expectations converge, assets for sale pick up and pricing stability allows for more accurate underwriting. The lower cost of capital will also be accretive to returns and support investment volume, which CBRE expects to increase between 15% and 20% this year.

With buying sentiment improving, CBRE forecasts a 5% to 10% increase in Asia-Pacific investment volume this year, driven by growth in Singapore, Korea, Australia and Hong Kong SAR, along with continued investor interest in Japan and India.