Real Estate 360掳
Our latest industry report reveals the outlook for the year ahead and analyses the challenges and investment opportunities real estate businesses are facing.
Our Real Estate 360° report, based on a survey of over 200 real estate businesses, uncovers the sentiment and market drivers for 2025 and beyond.
This year, respondents are feeling greater optimism about the market, with an overwhelming majority expecting residential and commercial values to increase and access to funding to improve. While many remain cautious about the economy, they expect investment barriers to ease.
We are at a critical point in time. With more capital likely available, the investment and development decisions taken now will shape the future of real estate. Despite the increased optimism, regulatory and environmental hurdles must still be managed. Businesses this year will also closely monitor government policy and infrastructure investment, both critical to progress.
covers key topics that real estate businesses may base their strategies on this year, including the economic and funding outlook, asset class trends, the tax landscape, infrastructure and policy, and sustainability.
- Growth in optimism
- Top investment picks
- Increasing tax concerns
- Infrastructure and policy
- Decarbonisation challenges
Growth in optimism
Concerns about economic volatility and interest rates remain but are less profound. With rates expected to fall, 75% of real estate businesses expect funding will remain the same or become more accessible this year, the most positive sentiment we have recorded in recent years. Businesses expect a range of funding sources to be available this year.
Top investment picks
Conviction remains strong for various forms of housing amongst investors. The living sectors continue to lead the way, driven by the supply-demand imbalance. Additionally, 69% of respondents expect commercial values to grow this year, which may enhance the appeal of a range of other assets.
Increasing tax concerns
Concerns over additional tax rises have surged up the list of investment barriers for real estate businesses. Respondents would welcome a reform to various taxes, including inheritance, capital gains and stamp taxes. Recent tax rises have contributed to a sense of nervousness, with 23% of businesses pointing to the overall tax system needing simplification.
Infrastructure and policy
57% of survey respondents rank energy as the top infrastructure priority. Infrastructure is poised to become a growth area for private capital to address the shortfall in government funding. Our findings also highlight concerns over political instability, with planning identified as the key policy area to help unlock real estate investment.
Decarbonisation challenges
A year of extreme global weather has sharpened focus on environmental progress. Decarbonisation remains complex and costly, although 47% of businesses believe they can decarbonise without sacrificing financial returns. Despite this positivity, there are some significant barriers. Even with recent technological advancements, our survey respondents rank the lack of economies of scale as a major obstacle to decarbonisation.
Partner, Head of Real Estate and Construction
"Real estate is more important than ever in creating sustainable assets that will shape the future of our cities and lived experiences. Government policy is critical; the future can only be realised when planning has been reformed, infrastructure improved and systems are in place to incentivise businesses."
