In the US, as at October 2025, transaction pricing was up 4.2% y-o-y, with all major property types recording gains on a monthly, quarterly and annual basis.
Global real estate appears to be turning a corner, with all 49 tracked markets delivering positive total returns in 3Q2025.
A sharp slowdown in new construction further strengthens the outlook. Elevated building costs — driven by higher material prices, expensive labour and persistently high financing rates — have significantly curtailed development starts.
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This reduced pipeline means existing investment properties will face less competition from new supply in the years ahead, supporting occupancy levels and rental growth over the medium term.
Six real estate strategies built for structural growth
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The sector has undergone a substantial de-risking following the value correction between 2022 and 2024.
For investors who have yet to reallocate, 2026 offers a compelling entry point.
Nuveen’s 2026 outlook highlights six high-conviction investment themes positioned to benefit from structural shifts, demographic trends and evolving macroeconomic dynamics.
1. Lenders have a solid foundation
Commercial real estate (CRE) debt provides a compelling foundation. The recent valuation reset and recalibrated loan-to-value (LTV) ratios create an attractive entry point for investors.
In the US, the continuation of the Federal Reserve’s current interest rate cycle should support lending activity and underpin property values.
Conditions in Europe are similarly favourable, with prime assets correcting by 20%–25%.
While offices have faced persistent headwinds, early signs of stabilisation are emerging. Industrial and logistics assets remain resilient, buoyed by e-commerce growth and supply chain reconfiguration.
Today, real estate debt offers yields comparable to those of high-yield corporate bonds, but with superior collateral in the form of physical assets.
Historically, recovery rates in real estate debt have exceeded 80%, even during periods of severe market stress.
2. Ageing population propelling healthcare demand
Demographic trends are driving healthcare demand, with an ageing population accelerating the need for medical outpatient buildings (MOBs).
Healthcare spending now accounts for more than one-sixth of US GDP, and the senior population is projected to grow by 68% by 2040.
Seniors spend three times as much on healthcare as younger cohorts, creating sustained tailwinds for the sector.
A structural shift from inpatient to outpatient care is well underway: hospital admissions have declined by 10%, while outpatient visits have surged 13% over the past decade.
MOB vacancy rates stand at 7.4%, compared with 13.9% for traditional office space, a spread of 650 basis points.
In Apac, Australia is on track to become a super-aged society by 2035, with more than 20% of its population aged 65 or older, while Japan’s rising number of single elderly households is fueling demand for senior living facilities.
3. Living sector favourable
Similar trends continue to make the living sector highly attractive. In the US, apartment fundamentals are improving as new supply moderates and peak deliveries give way to absorption.
Single-family rentals remain well-positioned for growth, supported by demographic tailwinds, ongoing suburban migration and affordability constraints that keep many millennial renters out of homeownership.
In Europe, the living sector is buoyed by record investment and robust performance. Housing prices are rising faster than incomes, reinforcing rental demand.
Southern and Central European nations, including Portugal and Spain, and several Eastern European markets are leading in house price growth.
At the same time, rental increases are driven by affordability challenges and persistent supply shortages.
Across Apac, resilience remains evident, with Tokyo at the forefront, driven by strong domestic and international migration.
4. Europe and Apac are attractive for student living
Student accommodation is also emerging as a compelling investment theme, particularly in Europe and the Apac region. In Europe, the market is evolving rapidly amid shifts in international student mobility.
Over the past 18 months, major education destinations such as Canada, Australia and the US have introduced more restrictive visa and immigration policies, resulting in sharp declines in international student numbers.
Europe has become the primary beneficiary of these changes, with countries including Germany, Italy, the Netherlands, France and Sweden absorbing a larger share of global enrolments.
High-growth markets such as France, Austria, Ireland and Spain are reporting y-o-y increases of 20%–30% in international student interest.
Australia’s student housing sector also stands out for its resilience, recording an 11% increase in international enrollments year-to-date despite broader global headwinds.
5. Necessity retail
Necessity retail continues to prove durable, supported by three fundamental characteristics: strategic locations in demographically favourable areas, the ability to attract best-in-class tenants, and sustainable footfall driven by market dominance.
In the US, grocery-anchored strip centres maintain occupancy rates 4% higher than non-anchored peers, while limited new supply, just 0.2% of existing inventory, supports rental growth.
In Europe, retail parks deliver average income returns of around 6%, underpinned by diversified tenant mixes spanning grocery, home goods and essential services.
Apac markets, particularly Australia’s east coast cities, offer compelling yields of 6%–7%, supported by strong population growth projections.
6. Tailwinds for light industrial
Light industrial is benefitting from structural tailwinds linked to global trade shifts. The re-emergence of trade barriers and other disruptions to international commerce are reshaping the industrial landscape in developed markets across North America and Europe.
By targeting international supply chains, these policies have incentivised companies to relocate production closer to the point of consumption, creating renewed growth prospects for manufacturing communities and previously overlooked markets.
As large corporates establish domestic facilities, whether within the US or across the EU, their suppliers and service providers are following suit, forming and reinvigorating industrial clusters. This dynamic is fueling sustained demand for specialised buildings across the supply chain.
Louise Kavanagh is chief investment officer and head of Asia Pacific, real estate, at Nuveen
