Market Radar Europe: Global real estate investment to surpass USD 1 trillion in 2026

Global real estate investment to surpass USD 1 trillion in 2026

The global real estate investment market is set to exceed USD 1 trillion by 2026, a 15% increase from 2025, according to forecasts by Savills. The Americas will remain the largest market, with an anticipated turnover of USD 570 billion, of which USD 530 billion will come from the US alone. 

The strongest growth, however, will be seen in Europe, the Middle East, and Africa (EMEA), where investments are expected to rise by 22% to USD 300 billion. 

A key focus of the market will be the prime office sector, which is projected to capture around a quarter of the total investment. Prime office rents and capital values are expected to rise, reflecting strong occupier demand and tightening supply. 

Additionally, other sectors such as residential, industrial, logistics, and retail are showing resilience, with investor optimism returning despite economic headwinds.

JLL’s Global Real Estate Outlook 2026 highlights the ongoing evolution of the commercial real estate market. It notes that economic stabilisation, moderating inflation, and lower interest rates will continue to drive demand for office spaces, industrial/logistics, and residential properties, while demand for data centres and energy-efficient buildings is also expected to grow.

As M&G Real Estate points out, AI will play a significant role in reshaping the real estate landscape, influencing office demand, occupational strategies, and driving growth in data centres and beyond as AI impacts how people live, work, shop, and access healthcare. 

Renewed confidence in European real estate

Europe's property sector is showing renewed confidence as it enters 2026, with Cushman & Wakefield’s European Outlook highlighting a shift from caution to action. After a challenging year in 2025, the region is poised for recovery, driven by stabilising economic conditions, easing financing costs, and structural growth factors. 

Key CRE sectors such as logistics, retail, hotels, and data centres are benefiting from improved credit conditions, while demand for ESG-compliant assets, particularly in prime office markets like London, Paris, and Frankfurt, continues to rise. 

The availability of debt capital is boosting market liquidity, leading to increased competition and attracting investors back into core assets. As inflation stabilises and fiscal support is renewed, sectors such as logistics and retail are experiencing growth, and housing demand remains strong, with Germany standing out as a market poised for further expansion.

Europe and GCC strengthen real estate ties

The India-Middle East-Europe Economic Corridor (IMEC) is set to become a major energy hub, connecting regions that account for 40% of the world’s population and 50% of global GDP. This corridor has the potential to boost energy flows, support economic growth, and enhance geopolitical collaboration, especially in the energy and data sectors. 

While conventional energy sources will dominate in the short term, long-term success hinges on large-scale investments and the affordability of low-emission energy, particularly hydrogen. 

Challenges such as the EU’s Carbon Border Adjustment Mechanism (CBAM) may impact low-emission energy flows, but IMEC’s integration of electricity grids and energy pools could reduce costs and benefit consumers. 

Meanwhile, the GCC region continues its expansion, with the Abu Dhabi Investment Authority (ADIA) capitalising on opportunities in private real estate credit and senior housing, focusing on markets like the US, UK, and Europe. 

ADIA’s investment strategy is driven by demographic trends and housing shortages, with a particular emphasis on senior housing assets, which it sees as offering attractive, long-term returns despite market uncertainties.

UK life sciences sector tackles talent and innovation gaps

The UK’s life sciences sector faces significant challenges, including a lack of long-term planning and talent shortages, as highlighted by the House of Lords Select Committee. 

Despite setbacks such as Merck scrapping a GBP 1 billion investment and AstraZeneca pausing projects, initiatives like the UK Medicines Manufacturing Centre of Excellence’s Resilience programme are addressing the skills gap by training future leaders with advanced VR technology. 

To foster innovation and attract global investment, the UK is modernising its regulatory frameworks and enhancing intellectual property protections, with the British Business Bank contributing USD 100 million to the SV8 Biotech Fund to support high-potential life sciences companies. 

In Cambridge, Railpen’s plans for a 1 million square foot laboratory and innovation park reflect the growing demand for world-class infrastructure, with the project set to enhance the region’s status as a hub for technology and research.

Tackling the UK housing crisis

The UK housing market has slowed following the November budget, according to RICS, with buyer enquiries falling at their fastest rate in over two years, due to factors like inflation and high interest rates. 

Despite this, opportunities remain in the housing sector, with Homes England aiming to deliver 280,000 new homes by 2030, focusing on tackling barriers to housebuilding and increasing social and affordable housing supply. 

In London, Ballymore and Penta Real Estate are partnering to deliver over 680 new homes across two sites, addressing the city's housing shortage. Additionally, Bromford Flagship secured GBP 150 million in sustainability-linked funding to support its housing growth, including 735 new affordable homes. 

As the UK real estate market adapts to challenges, such as elevated construction costs and slow planning processes, there is cautious optimism for sectors like residential development, particularly build-to-rent and co-living, and continued interest from global investors. 
 

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Look out for a new edition of the GRI Institute's Market Radar Europe next week!