Exclusive: global real estate market leaders reveal their expectations for 2025

Last week, Gustavo Favaron joined 120+ global real estate leaders in St. Moritz, Switzerland, representing 22 countries

January 30, 2025Real Estate

Last week I was in St. Moritz, Switzerland, with more than 120 of the most influential leaders in the global real estate market, from 22 countries. All this to participate in the most exclusive event on the GRI Club calendar: the GRI Global Chairmen’s Retreat.

🔹 And the hot topic? Donald Trump's presidency, of course.

In the conversations, it became clear that, while trade wars and tariffs will be work for the European Union and China, no one is expecting things to reach “Game of Thrones” level. Another interesting point is the bet that financial markets will moderate any political madness. The consensus? The USA continues to be the dominant market and the dollar, the global reserve currency - with no comparable competitor.

Surveys carried out during the event showed that the majority are optimistic about the real estate market over the next 12 months.

“What keeps you up at night?” That was the big question this year.

For 55% of participants, the answer was inflation and interest rates – which was already expected, considering previous years. Interestingly, this marks a shift in focus from 2024, when geopolitical tensions dominated concerns.

Other points raised in the discussion were:

How to align capitalization rates with the high cost of debt.
In a slower market, how to find assets that are truly tradable.
Bank loans are set to become more accessible and new sources of capital – such as sovereign wealth funds, Asian pension funds and family offices – are gaining prominence.

🔹 Data centers continue to be the “star of the moment”.

And they offer great opportunities. This was another point that caught attention.

But the message was clear: it is necessary to be careful with the inexperience of new entrants in the sector.

In the office market, which until yesterday was the ugly duckling, is once again attracting attention, right? The search for Triple-A assets in premium locations is at an all-time high. The logistics sector, despite being somewhat saturated, still shows an increase in rents, but without the same shine as the pandemic period.

The residential sector is also making waves, with Spain delivering high returns and Germany proving to be a hotbed for office conversions.

🔗 Keep an eye out: soon, we will publish a complete report on the GRI Hub with the main insights from these discussions!

The IMF bets on global growth of 3.3% for 2025, but with Trump tariffs on the radar

According to the IMF, the global economy is expected to grow 3.3% in 2025, with inflation falling to 4.2%. Sounds good, but they also warn about economic divergences growing out there.

🔹 In the USA?

Economically, the country may exceed initial expectations. Europe is not at the same pace: slow growth due to high energy costs. China is also a concern, with a very timid recovery.

🔹 Poland in European leadership:

With 3.5% expected growth, it is leaving giants like Germany (0.3%), France (0.8%) and Italy (0.7%) in the dust.

Germany, in fact, is going through a difficult time. The economy shrank 0.2% in 2024, marking the second consecutive recession. High costs, low demand for exports and lack of qualified labor are the villains of the moment.

Meanwhile, Trump has entered the game. The UK's growth forecast was raised to 1.6%, although the IMF highlights the risks of the tariffs proposed by the US president, which could disrupt trade, reduce investment and trigger inflation.

Trump announced that he intends to impose tariffs on imports from the EU and China, citing trade imbalances and fentanyl trafficking as reasons. In response, both the EU and China said they will protect their interests, but also reinforced the importance of maintaining open dialogue.

🔹 To deal with this scenario, the IMF suggests some measures: more flexible policies, fiscal reforms, stimulating innovation and more global cooperation to ensure a resilient economy.

Meanwhile, at the World Economic Forum in Davos, European leaders highlighted the need for strategic reforms to prepare the EU for the challenges of the global economy and US trade policies.

Ursula von der Leyen, president of the European Commission, spoke about the importance of strengthening EU integration, prioritizing energy independence, the unification of the capital market and the simplification of rules. She also advocated for stronger partnerships with the US and a practical approach to relations with China.

🔹 Christine Lagarde, president of the ECB, warned that it is essential to prepare for possible US tariffs and highlighted that energy prices and market barriers still need to be resolved to strengthen the EU's competitiveness.

Real estate market in India reaches historic record of US$ 11.4 billion

The real estate market in India is on fire! In 2024, it reached a historic milestone of US$11.4 billion in investments, a 54% jump compared to the previous year.

🌏 Where did the money come from?

70% were domestic investments.
And among foreigners? Singapore, USA and Canada together represented 25% of the total.

🏗 Where did all this go?

Land and greenfield development projects led, with 39%.
Offices came in second place, with 32%.
The remainder is divided between retail (9%), residential (8%), logistics (6%) and hotels (2%).

And what's next? Industry leaders are full of confidence for 2025. Domestic investors are expected to enter the game even more, especially in office, industrial and residential assets, according to Badal Yagnik, CEO of Colliers India.

Mumbai was the highlight of the year, attracting US$1.6 billion in institutional investments, representing 24% of the country's total. And the offices? They stole the show, with 58% of annual investments focused on this segment.

🌏 Latin America-Iberia relationship: reciprocal investments?

The interest of Latin American players in the Iberian real estate market remains firm and strong, especially when it comes to luxury and residential hospitality. After all, who doesn't want high returns in the long term, right?

🔹 But what about the opposite flow?

Then the game changes a little. Exchange rate volatility and political instability are working against Iberian investments in Latin America.

Still, nearshoring trends (hello, Mexico!) are creating new opportunities for investors looking to diversify their portfolios. And there's more: the GRI Club brought all this together in the Ibero-American Real Estate Investment report, which has already kicked off 2025 with valuable insights.

The highlight? Not all investors are the same, and the report highlights clear differences in the strategies and preferences of family offices and institutional investors.

🔗 Want to know more? Read our exclusive report!

💸 Tax reform in Brazil: the veto that got people talking

The veto of an important section of the tax reform – the one that talked about taxation of investment funds – became a hot topic in the financial and real estate market.

🔹 What happened?

With the veto, there was a general insecurity about the possible taxation of real estate investment funds (FIIs). Now, the government is evaluating sending a bill to Congress, trying to put things in order and bring legal certainty to the market.

🔍 The impact:

Brick, income and development funds are in the eye of the storm.
Paper backgrounds? They are less exposed, but still attentive.

Experts from the GRI Club Real Estate Legal Committee are already keeping an eye on developments. The expectation is that Congress will play a crucial role: whether reversing the veto or adjusting the game in collaboration with the market.

👉 To understand what all this means for the future of FIIs, GRI Hub brings this exclusive analysis. Check it out!