Real Estate investment outlook

By Kieran Farrelly, Head of Global Solutions, Real Estate at Schroders Capital

Current market circumstances and the economic outlook are likely to continue to lead to pressure on pricing of real assets globally over the coming months, although material inflation is easing and forward interest rate curves in the major markets are suggesting levels have peaked at their current elevated level. Uncertainty remains especially in light of recent geopolitical events and the risk of this triggering broader contagion effects. Fringe markets and secondary assets remain most susceptible to anticipated declines as investors and banks alike are looking to de-risk portfolios.

  • Schroders continues to see high inflation across a wide set of markets, though pressures have eased (lower energy prices, normalisation in supply chains) and the trend is pointing downwards.
  • However, geopolitical risks are exerting pressure on supply chains with conflict in the Red Sea elevating shipping costs.
  • We expect monetary policy to loosen with rate cuts being anticipated in 2024 as the growth and inflation dynamic shifts. Global trading conditions continue to be impacted by the prevailing environment, as flash PMIs remain weak.
  • We believe that 2024 will mark the start of a cyclical buying opportunity due to the extent and uneven pattern of the repricing experienced to date. Investors should remain patient but position themselves to capitalise on opportunities as they emerge on a sequential basis across major markets and sectors.
  • Our proprietary market valuation framework indicates immediate opportunities can be found in markets that have experienced the fastest repricing, such as the UK and Nordic region, followed by the US and other Continental European markets. In the Asia Pacific region, cyclical opportunities are focused on markets that align with China's delayed recovery and/or offer alternatives in the nearshoring/friendshoring of supply chains. Industrial and logistics assets have now largely rebased to attractive price points in most submarkets, which are supported by strong structural fundamentals -with prospective returns in Europe particularly compelling given limited supply.
  • The average real estate portfolio composition is evolving, and the ability to create the ‘core of the future’ across a range of segments ‘adjacent’ to the traditional staples of office, industrial retail and multifamily, is offering a range of early mover opportunities, especially in more operationally intense asset classes.
  • Key sustainability and impact considerations should be prioritised which means capital expenditure will have to increase to meet evolving regulatory and shifting tenant requirements, with increasing benefits to boost returns from rent premiums given scarcity of compliant assets.

Further reading :

Kieran Farrelli

Media contacts

Wim Heirbaut

Senior PR Consultant, Befirm

Tânia Jerónimo Cabral

Head of Marketing Schroders Benelux, Schroders

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Schroders Capital

Schroders Capital provides investors with access to a broad range of private market investment opportunities, portfolio building blocks and customised private market strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private market mandates.

The team aims to achieve sustainable returns through a rigorous approach and in alignment with a culture characterised by performance, collaboration and integrity.  

With $111 billion (£81 billion; €94.5 billion)* assets under management, Schroders Capital offers a diversified range of investment strategies, including real estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists). 

*Assets under management as at 30 June 2025 (including non-fee earning dry powder and in-house cross holdings)

Schroders plc

Schroders is a global investment manager which provides active asset management, wealth management and investment solutions, with £776.6 billion (€906.6 billion; $1064.2 billion) of assets under management at 30 June 2025. As a UK listed FTSE100 company, Schroders has a market capitalisation of circa £6 billion and over 5,800 employees across 38 locations. Established in 1804, Schroders remains true to its roots as a family-founded business. The Principal Shareholder Group continues to be a significant shareholder, holding approximately 44% of the issued share capital.

Schroders' success can be attributed to its diversified business model, spanning different asset classes, client types and geographies. The company offers innovative products and solutions through four core business divisions: Public Markets, Solutions, Wealth Management, and Schroders Capital, which focuses on private markets, including private equity, renewable infrastructure investing, private debt & credit alternatives, and real estate.

Schroders aims to provide excellent investment performance to clients through active management. This means directing capital towards resilient businesses with sustainable business models, consistently with the investment goals of its clients. Schroders serves a diverse client base that includes pension schemes, insurance companies, sovereign wealth funds, endowments, foundations, high net worth individuals, family offices, as well as end clients through partnerships with distributors, financial advisers, and online platforms.

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