JLL Global Real estate outlook

JLL’s Global Real Estate Outlook shows the first half of 2025 has been more disrupted and less predictable than anyone anticipated.

JLL says that uncertainty “isn’t going away any time soon”. The report points to US trade tariff policy has dominated the global economic narrative, but regulatory, tax and fiscal policies have also impacted real estate. Although the industry has remained resilient overall, there has been a range of impacts in different sectors.

Economic growth will be weaker than previously estimated, though this is not uniform across sectors. But high prices in construction are expected to persist, with more volatile inflation. However, JLL notes that the industry cannot ‘sit this out’ and wait for better conditions. Instead, they advise, “real estate actors need to adapt their decision making in this dynamic and unpredictable environment”.

There are opportunities in areas such as logistics and distribution, with major companies signing deals in several markets as they look to develop supply chains. JLL cites the example of Panattoni leasing 885,000 square feet to GXO Logistics in the UK in the second quarter.

Operational living is also seeing a boost with high investor demand and the growing urban population. The ageing population around Europe is also driving growth in the senior living sector.

There have already been considerable changes in the global office market. Many office occupiers are opting to delay space requirements, however this is far from universal. JLL expects global leasing volumes over 2025 to be higher than in 2024.

There is strong demand for high-quality office space that can provide flexibility and adaptability. JLL notes that the use of Flex space in the office market is on the rise, with growing demand for managed space solutions as well as more interest in flexible leasing solutions across the office and industrial sectors.

Overall, JLL concludes that the real estate sector is “well-positioned’ for the challenges of 2025, but the market will see changes in availability as the construction pipeline slows across most key sectors, but rents rise as space becomes more challenging to find.

One interesting prediction is that with tightening budgets, tackling cost pressures and energy security will drive decarbonisation efforts. JLL states: “The concept of decarbonisation is transforming from solely a sustainability consideration to a critical component of operational and risk management.”