Central banks’ initial rate cuts in 2024 spurred increased investment market activity. Inflation risk has diminished from peak levels and additional monetary easing is likely to continue through 2025 and into 2026.

Lower rates will aid investors’ refinancing efforts and boost M&A activity which has been more muted. The cost of debt has also improved since year-end 2023, and debt origination volumes are trending upward as lenders have broadened their focus

The living sector’s momentum will continue apace, across both mature and growing markets. Over the next five years, JLL expects $1.4 trillion will be deployed into living strategies. Transactional momentum is already building in the U.S., UK, Germany and Japan, as new deliveries taper off and rental rate growth normalizes. 

Investors’ wider search for opportunities will give rise to more opportunistic sectoral diversification. The long-term growth potential of alternative sectors, such as data centers, will continue to attract large institutional and cross-sector investors. Investment in data centers is strongest in the U.S., where 58% of data center investment has been focused over the past five years. However, there is growing impetus in Asia Pacific and parts of Europe, where investment is rising in particular due to the dramatic increase in data consumption in Greater China and Japan.