A structural shift in the global real estate market is becoming increasingly apparent, according to Morgan Stanley (MSCI) in its latest industry report. The long-standing dominance of the office sector is now being challenged, while residential and logistics assets are gaining ground. Simultaneously, the geographic balance is tilting in favor of the United States and emerging markets such as India.
According to analysts, 2024 represented a critical inflection point for the global professionally managed real estate sector. After a decade of sustained expansion, the market contracted for a third consecutive year, with overall value declining by 4.1% to $12.5 trillion (€11.25 trillion).
Although early forecasts had pointed to a period of stabilization, ongoing geopolitical tensions and macroeconomic volatility triggered a renewed slowdown. These disruptions have exposed underlying vulnerabilities while also accelerating the emergence of new structural dynamics and regional realignments across the market.
The rise in interest rates in recent years had already led to a decline in property valuations and significantly curbed transaction volumes. In 2024, the US dollar strengthened against nearly all major currencies, resulting in reduced valuations in markets such as Europe, Asia, and particularly in countries like Norway, Brazil, South Korea, and Japan. Overall, the negative currency impact amounted to -3.7% on a global scale.
Geographical Market Distribution
The Americas maintained their leading position, accounting for 42.7% of the global market (€4.41 trillion), followed by Europe, the Middle East and Africa (30.7%), and the Asia-Pacific region (26.6%). Of the 38 markets surveyed, 31 contracted, six experienced growth (notably Thailand, Poland, and Singapore), and only one remained virtually unchanged.
The United States remains by far the largest market, with a size of $4.9 trillion (€4.41 trillion), followed by China ($962 billion / €866 billion), the United Kingdom ($891 billion / €802 billion), Japan ($783 billion / €705 billion), and Germany ($675 billion / €608 billion). Together, these five countries represent 65.5% of the global market—a higher share compared to 2023.
Investment Vehicles and Portfolios
The majority of the market (61.4%) consists of unlisted portfolios, with a total value of $7.7 trillion (€6.93 trillion), while listed vehicles (such as REITs and property companies) account for $4.8 trillion (€4.32 trillion). Within the unlisted segment, collective investment funds play a key role, amounting to €3.15 trillion, with "core funds" holding the dominant share.
Despite the decline in total market value, transaction volume increased significantly—rising by 18% compared to 2023, when it had fallen by 48%. This rebound is attributed to the relative stabilization of interest rates during the second half of 2024, which helped restore investor confidence.
The turnover ratio (i.e., transaction volume as a percentage of total market size) stood at 6.2%, up from 4.0% in 2023. In certain countries, such as South Korea, Malaysia, and Spain, the ratio was notably high, indicating elevated market activity.
Transparency and Investor Confidence
The analysis, in conjunction with JLL’s Global Real Estate Transparency Index, indicates that markets with higher transparency tend to hold greater weight in the global landscape. Notably, 75% of total market value is concentrated in countries classified as "highly transparent," underscoring the critical role of transparency in fostering international investor confidence.
