Global Real Estate Perspective, November 2026

• Economic growth slows but remains resilient. Higher energy costs have put upward pressure on inflation worldwide and led many central banks to tighten monetary policy. A global bond sell-off has also driven up benchmark debt costs. But growth has held up better than anticipated, and a modest rebound is expected next year.
• Global real estate demand continues to expand. Global office leasing rose 5% year-over-year in Q3 to take volumes to a new post-pandemic peak, led by Asia Pacific. Logistics take-up picked up pace across regions, while retailers continue to expand in prime locations.
• Capital markets activity is positive year to date but growth moderated in Q3. Rising policy and benchmark rates are resetting buyer and seller price expectations, with asset pricing adjusting selectively. Credit markets continue to be broadly liquid though early signs of tightening are emerging, while property fundamentals are counterbalancing a moderating investment sales environment.

The war in Iran remained a dominant driver of the global economy in the third quarter, with the changing state of the conflict shaping energy and commodity markets. A truce briefly brought Brent crude below $70 per barrel in early July, but renewed hostilities pushed it back above $115 by quarter-end. Higher energy costs are lifting inflation and prompting many central banks to tighten policy, while a global bond sell-off has driven benchmark yields to multi-year highs. Investors now assume disruption will persist well into 2027. Even so, many 2026 GDP forecasts have been revised back up, with global growth expected to rebound modestly from 2.5% this year to 2.8% next year according to Oxford Economics.

Occupier demand continues to be resilient across property types. Office leasing rose 5% year-over-year in the third quarter, with volumes over the first three quarters reaching a new post-pandemic peak. Logistics take-up gained pace in all regions, while retail leasing remains active in prime locations and data center demand is at record levels.

Capital markets performance is generally positive, with industrial and logistics, retail and office posting solid year-to-date growth and fundamentals providing a counterbalance to the moderating investment sales environment. Rising policy and benchmark rates are weighing on underwriting assumptions and resetting price expectations, with asset pricing adjusting selectively across sectors, geographies and asset quality. Credit markets remain broadly liquid, with deep debt markets and tight lending spreads, although early signs of tightening credit conditions are emerging.

Global direct investment volumes are up 19% over the year to date. The pace of growth moderated in the third quarter with volumes rising by 7% year-over-year to US$235 billion as higher bond yields prompted investors to recalibrate. In the Americas, volumes are 21% higher year-to-date and up 12% in Q3. EMEA investment declined in Q3 but is up 9% over the first nine months of the year, with the U.K., Spain and the Nordics outperforming. Asia Pacific showed the strongest growth, with volumes up 29% year-to-date and 18% in Q3; Japan, the region’s most liquid market, rose 21% and Australia recorded US$10 billion of investment during the quarter.

Offices: U.S. and Asia Pacific drive continued expansion

Global office leasing rose by 5% year-over-year in Q3, supported by robust growth in Asia Pacific and continued expansion in the U.S., while activity in Europe was broadly stable. Following a subdued start to the year, volumes over the first three quarters have increased by 1% to a new post-pandemic peak. The global vacancy rate declined marginally during the quarter to 16.4%, although headline levels mask an increasingly polarized market with elevated vacancy concentrated in obsolete, secondary stock. Deliveries globally are forecast to fall to a record low in 2027. Construction remains minimal in the U.S. and new supply in Europe is expected to be at the lowest level in over 20 years, while Japan, Singapore and South Korea are also seeing tightening conditions.

Future trends: Continued growth in demand as occupiers balance aspiration and affordability
 

Short-term: Risks from conflict, inflation and rising borrowing costs remain elevated but resilient economic growth and corporate performance are expected to keep global leasing rising at a moderate pace through the end of the year and into 2027. Demand from expanding industries and renewals should support further growth in the U.S. next year, while activity is anticipated to edge higher in most major markets across Europe and Asia Pacific.

Long-term: Most organizations are anticipating net headcount expansion and prioritizing full-time employment, according to JLL’s Future of Work 2026, with AI redesigning roles and shifting the workforce toward higher-value activities. Portfolio planning that prioritizes quality, experience, technology and collaboration will keep demand focused on the top end of the market, even as companies balance that investment against rising rents and operating costs.

Logistics: Leasing momentum strengthens in Q3

Occupier demand picked up pace across regions during the quarter, with 3PL tenants and e-commerce remaining most active amid structural shifts in supply chains. Expansion from manufacturing and defense is also contributing to growth. Take-up in North America rose by 33% year-over-year in Q3, with the strongest growth in big-box space. In Europe the market is transitioning from a phase of cautious recovery to expansion, with leasing 11% higher year-over-year. Absorption in Asia Pacific was up by 22%, with growth across most major markets.

Future trends: Market bifurcating with demand anchored by structural drivers
 

Short-term: The industrial sector is on a firmer footing than a year ago, with demand increasingly anchored by structural drivers. The market continues to bifurcate, with modern big-box product in the tightest markets approaching scarcity and gaining pricing power while older and smaller buildings face rising vacancy and rent pressure. Strong leasing momentum will push up rental growth for newer space, although higher construction and borrowing costs will temper new supply in some markets.

Long-term: Data center supply chains, power infrastructure, advanced manufacturing, defense and reshoring are reshaping where and what occupiers lease, favoring power-capable, automation-ready Class A facilities. 3PL and e-commerce leasing are expanding, with many companies consolidating into buildings that can accommodate higher energy use, advanced automation systems and robotics.

Retail: Strong demand continues despite pressure on consumers

Retail leasing markets remain active in most major markets, supported by resilient consumer spending. Demand is concentrated on prime assets, while properties in secondary and weaker locations face longer transaction times as increasing costs prompt some retailers to rationalize store portfolios. The U.S. recorded an increase in absorption as net store openings outpace closures. Occupancy rose in prime centers across Asia Pacific, while dominant locations in Europe are seeing strong competition for space amid near-zero vacancy.

Future trends: Retailer demand remains robust amid evolving business models
 

Short-term: Continued consumer spending growth will be tested by rising inflation and borrowing costs. A growing bifurcation in spending patterns is contributing to pressure on mid-market retailers and outperformance for essentials and premium retail. Construction is on pace to stay historically thin, supporting competition for well-located space.

Long-term: Rising operational costs are prompting retailers to focus on measures to increase efficiency and margins, generate recurring revenue and boost customer interaction. The use of AI analytics is enabling more predictive decision-making and personalized in-store interactions, while business models are shifting from single transactions towards brand experience, subscription and sharing concepts that foster long-term customer relationships and create stable, predictable income streams.

Living: Global living investment slows across regions

Global living investment slowed by 9% year-over-year in Q3 as rising inflation, debt costs and bond yields weighed on multifamily pricing. Transaction volumes declined by 7% in the U.S., 19% in EMEA and 5% in Asia Pacific. Across regions, capital increasingly targeted specialized sectors, notably student and seniors housing and land leases.

Future trends: Fundamentals support long-term growth in the living sector
 

Short-term: Regulatory risk and housing affordability pressures are likely to shape living investment in the near term. Rent controls, tax changes and restrictions on large-scale investors are altering underwriting assumptions and prompting capital to reassess market selection and strategy. At the same time, stretched homebuyer affordability is keeping more households in the rental market for longer, supporting occupancy but testing the pace of rental growth.

Long-term: Aging populations and smaller household sizes will continue to increase demand for senior living, healthcare and smaller, flexible homes, while persistent underbuilding and urbanization leave supply struggling to keep pace. This structural imbalance supports durable rental demand and income growth. Pension and insurance funds drawn to the inflation-linked, defensive income of living assets are likely to keep increasing allocations, deepening the investor base and supporting liquidity across a wider range of markets and specialized formats.

Hotels: Resilient performance despite travel disruption

Global travel demand has remained resilient despite disruption from the conflict in the Middle East, with the Americas, Asia Pacific and Europe each recording positive revenue per available room (RevPAR) growth through August 2026. Pricing discipline sustained average daily rate gains while occupancy remained broadly stable, signifying that demand has been redistributed rather than lost as cost-conscious travelers shifted to short-haul and domestic trips. Hotel transaction volumes were down 2% year-over-year in Q3 but remain 16% higher year to date, with investors recalibrating strategies rather than retreating.

Future trends: Operational flexibility key to outperformance as costs rise

Short-term: Geopolitical volatility will continue to shorten travelers’ decision horizons through the remainder of 2026, with contracting booking windows and softer long-haul segments. Underlying travel appetite is intact globally, with a growing focus on nearby and domestic destinations. Margins remain constrained by inflation across energy, wages, provisions and debt service costs, so near-term outperformance will hinge on operational flexibility, rigorous cost control and the ability to recalibrate strategy quickly.

Long-term: Assets that can reprice quickly, actively manage costs, diversify distribution and optimize operations are positioned to outperform in 2027 and beyond. With limited supply pipelines in many markets amid high construction costs, hotels with differentiated positioning are best placed to capture upside. New capital that has historically favored traditional property types increasingly recognizes hotels as income-producing real estate with cash flows that adjust in real time, forming a hedge against macroeconomic volatility.