Commercial Real Estate - Worldwide

The Commercial Real Estate market market worldwide is projected to reach a staggering value of US$118.10tn by 2024.
This market is expected to show an annual growth rate (CAGR 2024-2029) of 1.40%, leading to a market volume of US$126.60tn by 2029.
In comparison to other countries, the United States is anticipated to generate the highest value in the Real Estate sector, with an estimated amount of US$25.3tn in 2024.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Worldwide is experiencing significant growth and development.

Customer preferences: In the Commercial Real Estate market, customers are increasingly looking for properties that offer flexibility and adaptability. They want spaces that can be easily modified to suit their changing needs and accommodate new technologies. Additionally, there is a growing demand for environmentally sustainable buildings, as customers prioritize energy efficiency and green certifications.

Trends in the market: One of the key trends in the Commercial Real Estate market is the rise of co-working spaces. This trend has been driven by the increasing number of freelancers, entrepreneurs, and remote workers who are seeking flexible and collaborative work environments. Co-working spaces provide these individuals with the opportunity to work in a professional setting while also fostering a sense of community. As a result, the demand for co-working spaces has been steadily increasing in Worldwide. Another trend in the Commercial Real Estate market is the development of mixed-use properties. These properties combine commercial, residential, and recreational spaces in a single location, creating vibrant and dynamic communities. Mixed-use properties are appealing to customers who value convenience and want to live, work, and play in the same area. This trend has been particularly prominent in urban centers, where land is limited and there is a need for efficient use of space.

Local special circumstances: In Worldwide, there are several local special circumstances that are influencing the Commercial Real Estate market. One of these is the rapid urbanization and population growth in many cities. As more people move to urban areas, there is an increased demand for commercial spaces to accommodate businesses and support economic growth. This has led to the development of new commercial real estate projects in major cities across Worldwide. Another local special circumstance is the government policies and regulations that impact the Commercial Real Estate market. Governments in Worldwide are implementing measures to promote sustainable development and reduce carbon emissions. This has led to the adoption of green building standards and incentives for developers to incorporate environmentally friendly features in their projects. These policies are shaping the Commercial Real Estate market by influencing customer preferences and driving the development of sustainable properties.

Underlying macroeconomic factors: Several underlying macroeconomic factors are contributing to the growth and development of the Commercial Real Estate market in Worldwide. One of these is the overall economic growth and stability in many countries. As economies expand, businesses are growing and expanding their operations, leading to an increased demand for commercial spaces. Additionally, low interest rates and favorable lending conditions are making it easier for businesses to invest in real estate. Another macroeconomic factor is the globalization of businesses. With the advancement of technology and communication, businesses are becoming more interconnected and expanding their operations to new markets. This has created a demand for commercial spaces that can accommodate international businesses and support their global operations. As a result, developers are building properties that cater to the needs of multinational corporations and promote international collaboration. In conclusion, the Commercial Real Estate market in Worldwide is experiencing growth and development driven by customer preferences for flexibility and sustainability, as well as the trends of co-working spaces and mixed-use properties. Local special circumstances, such as rapid urbanization and government policies, are shaping the market, while underlying macroeconomic factors, such as economic growth and globalization, are driving demand.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.