Global Real Estate - What's coming up in 2024?

After all of the macro-economic and geo-political turbulence and challenges of 2023, what can we expect in 2024 - are we seeing reasons for optimism when we consider the Real Estate market on a global scale? What’s in store for 2024 and where do we see the hot asset classes and areas of most activity over the coming year?


Many of the macro-economic and geo-political challenges of 2023 look set to continue into 2024 for the UK real estate market, but there are reasons to be optimistic; inflation is starting to slow, and it’s hoped that the base rate will be reduced in response. That said, the debt market is still expected to be constrained, meaning deal volumes are likely to continue to be down, but we do expect some forced sales and distress as pre-COVID borrowing facilities mature, which will present opportunities for well capitalised investors to grab attractively priced assets and for those offering non-traditional finance.

In terms of specific asset classes, polarisation of office and retail stock based on quality will persist, and we expect data centres, logistics and life sciences assets to continue to be hot. Mortgage interest rates have started falling sharply in the first week of 2024, which may stir up activity in the residential sales market. In the residential build-to-rent sector, demand will continue to outstrip supply, driving up rental growth. Political changes are afoot in the UK, with a general election expected later this year; the polls are currently predicting a change of government, but the past few years have taught us to expect the unexpected in politics!


2023 was a challenging year for both the German rental market and the investment market. Turnover fell by half on average. The same applies to the number of building applications for new residential and commercial buildings. At the same time, there were a large number of insolvencies, particularly among property developers and tenants, caused by a combination of rising interest rates, the energy crisis, uncertainty about valuations and a sharp increase in construction costs.

Now that interest rates have stabilised to a certain extent, the uncertainty surrounding interest rate trends and pricing looks set to slowly dissipate by 2024, meaning that the investment market is expected to stabilise and grow. Market participants also expect investment property prices to return to market levels in 2024, although this will be partly due to the fact that some owners will simply be under pressure to sell.

Another key issue in 2024 will be the adaptation of existing properties to meet sustainability requirements. Although the German government has currently suspended some of the relevant incentive programmes designed for this purpose, the requirements of the Building Energy Act and the Renewable Energies Act will have to be met in the long term, so the real estate and construction industry will have to prepare for this. It is also expected that some institutional investors will sell parts of their property portfolios as they will otherwise not be able to meet their ESG targets.

The ongoing housing shortage, particularly in major cities, means that demand for rental apartments remains high. Elevated construction costs, rent freezes and difficult financing conditions are unlikely to ease the situation in the short term, although government subsidy programmes and legislative changes should help. The constrained situation in the hotel sector is also improving.

In summary, the outlook for the German real estate market is expected to improve, accompanied by an increase in investment and rental activity. In addition, the focus will remain on sustainable construction.


The real estate market in Italy has been impacted by macro-economic and geo-political challenges in 2023, which look set to continue into 2024, especially on the financing side.

There is however a significant exception to this when we look at the hospitality sector, which continues to grow. This applies to both traditional accommodation (hotels and similar) and short-term rental accommodation, such as serviced apartments, particularly in the historic centres of the major cities (Florence, Rome, Venice and Milan).

In response to requests by different stakeholders, and following the example of other cities (such as New York), in December 2023 the Italian government adopted a first set of regulations to regulate short stays. In addition to these regulations, some major cities have set planning limits in relation to the construction of new hotels and tourist accomodation. These regulations have had a significant impact on the local hotel market in Florence, similar limits already apply in other cities such as Venice.

So looking ahead into 2024, recent trends in tourism comfirm the Italian hospitality sector as a hot asset class, with a relentless interest from international institutional investors. However it should be noted that this market is becoming increasingly regulated especially in the major tourist cities, which is something that potential investors need to keep a careful eye on.


With high interest rates, supply-chain disruptions and labor shortages continuing to contribute to rising costs in development, reducing construction costs will remain a top priority for development firms across the U.S. Despite the federal reserve’s aggressive interest rate hikes over 2023, banking activity is looking more stable coming into 2024 resulting in more resilient global economic growth than anticipated. And with commercial real estate buyers having more difficulty sourcing capital given tightening loan standards and higher borrowing costs overall, there will be a need to look to alternative lending sources, such as mezzanine and preferred debt to offset deployment issues.

As remote working continues to remain dominant, Class A office space that offers additional value to employees with health and wellness, social spaces and hospitality will be better positioned for higher occupancy outcomes.  And while retail demand has maintained momentum amid big box retailer fall-out, those in-store retailers that look to provide a combined e-commerce and physical location platform will be better placed to succeed in 2024.

After significant growth in recent years, the life sciences and industrial sectors are beginning to slow and see demand level out in the post-pandemic era. With an inflation driven slow-down in consumer spending and land use challenges for warehouse sites, developers can expect growth in the industrial sector to slow. Similarly, even with a record number of life science products being delivered in 2024, due predominantly to new drugs and new R&D, momentum for life sciences development will also lessen, but is still expected to experience growth over the long term. Data center demand, alternatively, is expected to double by 2030 in an effort to support new waves in artificial intelligence.

While once viewed as a low risk asset class, multi-family may be facing mixed stability given supply chain shortages, difficulties in obtaining permits and tightening financing terms; yet even with such challenges, the freeze on the housing supply is not likely to thaw in 2024.

Politically, the 2024 presidential election, which is far from clear at this point, will have a material impact on the U.S. economy, both parties confirming that there will be a clamping down on Chinese investment in the U.S. (including at universities and in private sector companies and land acquisitions) and a trend toward bringing manufacturing back to the U.S.



Authored by Daniel Norris, Lea Ann Fowler, Sabine Reimann, Maria Deledda, and Lauren Addy.

Daniel Norris
Global Head of Real Estate
Lea Ann Fowler
Sabine Reimann
Maria Deledda
Lauren Addy
Senior Associate
Stella Bliss
Counsel Knowledge Lawyer
Ingrid Stables
Senior Knowledge Lawyer


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