• Greater economic stability as trade concerns ease. While growth remains subdued, major markets are expected to see continued economic expansion in 2025. The outlook for next year is more positive, supported by lower average interest rates and a more predictable global trading environment.

• Global real estate markets remain resilient through the third quarter. Pent-up industrial demand is building, with activity rising in several markets. Retailers continue to expand in core locations, while global office leasing in 2025 is at its highest level in six years.

• Investor sentiment is improving notably, resulting in a more competitive transactional market. Direct investment volumes growth continues to rebound and accelerated during the third quarter, signaling investors’ increased confidence in the market.

Direct investment activity reached US$213 billion in the third quarter of 2025, –an increase of 17% year-over-year. Year-to-date transaction volumes have now increased by 21% compared to 2024. The Americas posted particularly strong gains as transaction activity rose 26% in the third quarter led by the United States. EMEA investment volumes were 19% higher than last year in Q3, with the UK and Germany the two most liquid markets while Spain, Sweden and Belgium all posted robust growth. Trends were more nuanced in Asia Pacific where direct investment declined by 8% year-over-year. Activity in Japan remained strong despite the normalization of borrowing rates, with volumes rising by 16% year-over-year.

Cross-border investment has continued to recover in spite of geopolitical pressures, with third quarter growth of 7% year-over-year and year-to-date volumes 26% higher. The share of cross-border flows into each of the regions has remained relatively steady so far in 2025.

Office leasing demand continued to increase moderately from the previous year during Q3. Expansionary demand in North America pushed take-up higher, while longer deal timelines in Europe and Asia Pacific contributed to lower activity. Following on from a strong first half, global volumes over the first nine months of the year were at their highest level since 2019.

Logistics leasing activity improved in North America and Europe during Q3, although greater occupier caution was evident in some Asia Pacific markets. New supply has fallen significantly from peak levels and will continue to decline through 2026. Vacancy is already contracting in Asia Pacific, while availability is likely to peak and start declining in both North America and Europe over the next 12 months.

Following the elevated growth seen in 2022 and 2023, global revenue per available room (RevPAR) trends are normalizing further. Europe is leading RevPAR growth, followed by Asia Pacific, with the pace of growth moderating in the Americas. Global urban markets should continue to see further increases, pushed by lower new supply and expanding group and corporate travel. 

Future trends: Global hotel brands prioritize unit growth over management contracts 

Short-term: With slowing new supply, hotel brands are using their balance sheets to boost unit growth via M&A, strategic partnerships and conversions. The global portion of franchised hotels (i.e., those managed by third parties) is expected to increase further, creating opportunities in the highly fragmented third-party management space with new players, increased partnerships and M&A likely to emerge. 

Long-term: The global travel landscape is undergoing a significant transformation with markets like India and Saudi Arabia poised to play increasingly significant roles in shaping future travel patterns, driven by shifts in demographics, economic power, and consumer preferences. As consumers increasingly focus on experiences, traditional hospitality brands are expanding their offerings to new verticals, boosting the growth of lifestyle hotels.