
US and global commercial real estate — fourth quarter 2025 outlook
In today’s environment, we believe properties with income growth that’s less tied to the business cycle are best positioned to outperform.
Central banks are adopting more accommodative stances, with rate cuts and steady inflation supporting looser monetary policy across several regions.
AI and technology sectors continue to drive growth, particularly in Asia and the US, where innovation and investment remain strong.
Political and trade developments remain influential, shaping market sentiment and contributing to regional performance differences.
The Monthly Market Roundup for August highlights a generally positive global market environment, with equities performing well across most regions. Central banks are navigating inflation and growth dynamics, with several rate cuts including Bank of England and dovish signals with the Federal Reserve. Political developments in France and the US added volatility, while trade tensions eased in many regions. Technology and AI sectors continued to drive growth, especially in Asia and the US. Fixed income markets showed divergence, with US Treasuries outperforming and European bonds under pressure.
European equities neared record highs in August, supported by strong economic data and earnings. Spain and Italy outperformed as a result of banking sector strength, while France lagged due to political instability. Inflation edged up slightly, but falling services inflation suggests the ECB will hold rates steady. Economic indicators like PMI and loan activity remained positive, though trade surplus narrowed due to weaker US exports.
UK markets rose on better-than-expected growth and improved consumer sentiment. The Bank of England cut rates to 4.00% after a split vote, amid rising inflation and uncertainty over future moves. GDP growth slowed but remained positive, while employment data showed stagnation. Consumer confidence ticked up modestly.
US Treasuries rallied on weak jobs data and dovish Fed signals, while UK and European bonds declined. Yield curves steepened, with long-term yields hitting multi-year highs. Political pressure on the Fed raised concerns about its independence. US corporate bonds performed well; UK bonds were mixed due to gilt weakness.
Asia-Pacific equities gained, led by China and Hong Kong on easing property rules and AI optimism. Taiwan and Japan also advanced, while India declined due to US tariffs. Korea remained flat amid cautious policy and weak trade data. Australia rose following a rate cut and strong manufacturing activity.
Emerging markets benefited from a weaker dollar and easing trade tensions. Latin America saw gains, with Brazil and Chile supported by monetary easing and tariff relief. Eastern Europe attracted investment on strong earnings and supportive EU trade policies. Middle Eastern markets were mixed due to oil volatility and Fed-related concerns.
US Treasuries rallied on weak jobs data and dovish Fed signals, while UK and European bonds declined. Yield curves steepened, with long-term yields hitting multi-year highs. Political pressure on the Fed raised concerns about its independence. US corporate bonds performed well; UK bonds were mixed due to gilt weakness.
In today’s environment, we believe properties with income growth that’s less tied to the business cycle are best positioned to outperform.
We speak with IFI portfolio managers about the factors driving US investment grade and how they are navigating the current fixed income environment. Read online.
Why APAC real estate may offer growth, diversification, and value for institutional investors amid global market uncertainty in 2025.