Global Real Estate Rises on Asia, Europe Gains

Global Real Estate Sees Divergent Growth

Global real estate performance in 2025 was marked by strong regional divergence. The FTSE EPRA Nareit Developed Index posted a 10.7% total return for the year, with Developed Asia and Europe significantly outperforming North America. These results underscore the impact of regional economic trends and sector concentration on overall returns.

Regional Leaders Drive Returns

Developed Asia surged ahead in 2025 with a 29.5% USD total return, buoyed by broad-based sector strength. Retail rose 36.1%, self-storage 35.0%, and office 34.6%. Europe also delivered robust performance at 21.2%, powered by a 48.8% gain in health care and 42.4% in retail. Currency fluctuations played a role, moderating local currency returns in Europe.

Sector Winners and Weaknesses

The diversified sector was the largest contributor in Developed Asia and Europe, while North America maintained a more balanced sector profile. Globally, diversified and health care led sector performance with returns near 30%. In contrast, data centers and timberland faced headwinds, ending the year down 13.7% and 10.2%, respectively. In North America, technology-driven real estate lagged, but health care notched a 28.7% return. Despite data centers’ underperformance in 2025, recent institutional reallocation suggests longer-term confidence in the sector’s fundamentals, particularly alongside retail.

Why Global Real Estate Performance Matters

These results highlight the dynamic nature of global real estate, where regional economic trends, currency shifts, and sector specialization drive performance. Investors can benefit from tracking global real estate trends and adjusting allocations according to regional and sector strengths. As 2026 begins, market watchers will be closely monitoring for shifts in leadership across regions and asset types.