Global Real Estate Market Roiled by Fed’s Rate Cut, Dubai IPO Frenzy and China Slump – Regional Sectors Face Turning Point

September 18, 2025
by
Global Real Estate Market Roiled by Fed’s Rate Cut, Dubai IPO Frenzy and China Slump – Regional Sectors Face Turning Point
  • Fed’s Surprise Rate Cut Lifts Hopes: The U.S. Federal Reserve delivered its first interest rate cut since 2024, a quarter-point trim that stoked optimism for relief in housing markets wtop.com. U.S. mortgage rates dipped to ~6.35%, their lowest in nearly a year wtop.com, though experts caution rates may not keep falling if inflation flares up wtop.com.
  • North America’s Mixed Signals: U.S. homebuilder confidence remained flat at a low level in September, but builders’ six-month sales outlook hit its highest since March as they anticipate cheaper financing ahead worldpropertyjournal.com. Meanwhile, retail real estate saw its first back-to-back quarterly decline since the pandemic, with 15 million sq. ft. of store space vacated in H1 2025 amid weak consumer spending frostbrowntodd.com. On a brighter note, office leasing showed early signs of revival, with positive net absorption returning in many markets and investor sentiment “thawing” even for lower-tier properties frostbrowntodd.com frostbrowntodd.com.
  • Europe’s Cautious Optimism: The European Central Bank held rates steady earlier in September, and a new survey finds 38% of German institutions now deem property prices “low or fair” (up from 18% last year), signaling improved buyer appetite costar.com. In the UK office sector, landlords and tenants have begun questioning the “amenities arms race” – focusing instead on core needs like location and sustainability as the market stabilizes costar.com. Luxury retail is alive and well in France: U.S. furniture brand RH (Restoration Hardware) just opened a lavish seven-story flagship on Paris’s Champs-Élysées, complete with rooftop restaurants and design studios, underscoring confidence in prime retail locations costar.com costar.com.
  • Asia-Pacific Adjusts Course: China’s housing slump deepened – new home prices fell another 0.3% in August, marking well over a year of monthly declines reuters.com. “Based on current data and market trends, the real estate market is likely to face significant adjustment pressure in the near term,” warns Zhang Dawei of Centaline, noting anticipation of stronger stimulus like looser credit and a possible rate cut to China’s Loan Prime Rate reuters.com. Across Asia-Pacific, hotel investment volumes totaled just $4.7 billion in H1 2025 (down 23% year-on-year) as investors concentrated on safe havens like Japan, China, Australia, Singapore, and South Korea worldpropertyjournal.com worldpropertyjournal.com. “Investors are gravitating to gateway cities where fundamentals remain strong, but decision-making timelines have lengthened,” said Nihat Ercan, CEO of JLL Hotels & Hospitality, pointing to a divergence between seller expectations and cautious buyer valuations worldpropertyjournal.com. Even so, private equity and high-net-worth investors are stepping up acquisitions of prime hotels, and JLL projects Asia-Pacific hotel deal volume will rise 5% in 2025 to $12.8 billion as pending transactions close in the second half worldpropertyjournal.com.
  • Middle East Booms and Rebalances: The Gulf’s IPO frenzy continues – Dubai Investments announced plans to float a 25% stake in its flagship Dubai Investments Park (DIP), a 2,300-hectare mixed-use industrial, commercial and residential zone, in an IPO that could value DIP at up to $2.5 billion moderndiplomacy.eu moderndiplomacy.eu. The move builds on robust investor appetite in the UAE’s booming real estate market and recent successful property-linked listings (e.g. a $585 million Dubai REIT IPO in May) moderndiplomacy.eu moderndiplomacy.eu. The listing would unlock capital for Dubai Investments’ expansion and underscores Dubai’s position as a hot IPO venue amid surging real estate demand. Meanwhile, Saudi Arabia’s $trillion “giga-projects” are hitting speed bumps. The kingdom’s grand Vision 2030 developments – new futuristic cities and resorts like NEOM – have slowed their pace in 2025, as cost inflation bites and lower oil revenues force a strategic re-think costar.com costar.com. Some rollouts are stalling or being deferred, tempering earlier ambitions of near-term, carbon-neutral mega-cities. Still, Saudi officials remain intent on diversifying beyond oil, and these projects are expected to proceed more gradually rather than be abandoned.
  • Africa’s Turning Point: In Egypt, a landmark housing reform is underway – the government is ending decades-old rent caps that have kept some rents as low as $1/month since the 1960s. The law will phase out those frozen contracts over seven years, allowing steep rent hikes on formerly controlled units stimson.org. While aimed at market liberalization as part of an IMF-backed economic plan, the change has sparked anxiety. Critics warn the shift could trigger evictions and price shocks for millions of Egyptian tenants despite official pledges to expand affordable housing alternatives stimson.org. In South Africa, by contrast, investor confidence is flooding back. Cape Town’s downtown (CBD) logged R9.03 billion (~$480 million) in property projects in 2024/25 – a sharp rise from R7.3 billion the prior year bizcommunity.com. The city’s latest annual State of the CBD report (released Sept 17) counted 27 developments recently completed or underway, with thousands of new residential units planned to meet surging demand for urban living bizcommunity.com. “All the big players in property development are prepared to invest in the Cape Town CBD. We’re getting more interest from national and international investors, too,” said Rob Kane, chair of the Central City Improvement District bizcommunity.com bizcommunity.com. Two luxury high-rise hotels are under construction in mixed-use towers as Cape Town’s year-round tourism boom boosts the hospitality sector bizcommunity.com. Ultimately, Kane notes, the influx of projects means “more buildings mean more people,” which bodes well for the city center’s vibrancy and local economy bizcommunity.com.
  • Latin America: Luxury and Liquidity Crunch: Mexico is set to debut a new ultra-luxe resort community on the Pacific Coast. Developer Thor Urbana announced that Siari, a Ritz-Carlton Reserve Residences and Hotel enclave in Riviera Nayarit, is nearing completion, with the first oceanfront homes to be delivered by late 2025 globenewswire.com. Perched on 900 acres of jungle-clad cliffs, Siari offers 34 private residences alongside a 90-room Ritz-Carlton Reserve hotel, blending high-end living with eco-conscious design and local cultural touches globenewswire.com. “With Siari, we are crafting a nature-driven residential experience that seamlessly blends the region’s rich culture and a deep commitment to conservation with world-class service,” said Jaime Fasja, Thor Urbana’s Co-CEO globenewswire.com. Thor Urbana’s chairman Joe Sitt added that pairing sustainable design with Ritz-Carlton’s renowned hospitality “sets a new standard for luxury living in Latin America” globenewswire.com. In Brazil, however, tight monetary policy is casting a long shadow over real estate. The Central Bank in Brasília held its benchmark Selic interest rate at a punitive 15% on Sept 17, defying expectations for easing reuters.com. It’s the second straight meeting with no change after an aggressive 450-basis-point hiking cycle through late 2024 reuters.com reuters.com. Policymakers cited persistently high inflation (5.1% annual, well above the 3% target) and a too-tight labor market as reasons to keep borrowing costs elevated reuters.com. The prolonged credit squeeze is damping Brazil’s housing affordability and development activity – financing for projects remains expensive, and developers warn that double-digit mortgage rates put homeownership out of reach for many middle-class Brazilians punchng.com punchng.com. Analysts now predict modest rate relief might only start at year-end; until then, Latin America’s largest economy will continue to grapple with an “extended period” of restrictive monetary policy reuters.com reuters.com.

Regional & Sector Highlights:

North America (U.S. & Canada)

Residential: In the United States, the mid-September news cycle was dominated by the Fed’s policy pivot and its impact on housing. The Fed’s quarter-point rate cut on Sept. 17 – its first cut since late 2024 – immediately fed hopes of cheaper mortgages ahead wtop.com. Indeed, 30-year fixed mortgage rates had already slid to 6.35% (their lowest in 11 months) on anticipation of the move wtop.com. Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index, held steady at a depressed level of 32 in September (well below the neutral 50 mark) worldpropertyjournal.com. Builders still face an uphill battle with high construction costs and wary buyers. Yet there was a notable uptick in optimism: the index’s forward-looking six-month sales outlook jumped two points to 45, its best reading since spring worldpropertyjournal.com. “While builders continue to contend with rising construction costs, a recent drop in mortgage interest rates should help spur demand,” said NAHB Chairman Buddy Hughes, pointing to the brighter sales expectations ahead worldpropertyjournal.com. NAHB’s chief economist Robert Dietz added that easing mortgage rates, coupled with the Fed’s expected cuts, will also bring down builders’ own financing costs, “relieving some pressure on new development” worldpropertyjournal.com. Early evidence of relief: nearly 40% of U.S. builders still had to cut new-home prices in September to entice buyers, but the average price reduction held at 5%, no deeper than it’s been since late 2024 worldpropertyjournal.com.

At the same time, the Fed’s rate cut is no panacea for housing. Mortgage rates might not fall much further – or could even rebound – if inflation surprises on the upside. “The Fed has signaled the potential for two more rate cuts this year… However, there are still risks of a reversal in mortgage rates,” cautioned Bright MLS economist Lisa Sturtevant, noting that a hot September inflation report could send borrowing costs back up wtop.com. In other words, the U.S. housing market’s recovery remains tentative. Transaction volumes for existing homes are still near historically low levels (2024 saw the fewest home sales in nearly 30 years) wtop.com, and affordability is pinched by prices that soared ~50% in the last five years. “Today’s cut will not be enough to break up the housing market logjam,” Sturtevant said, arguing that only further rate declines and slower home price growth (or outright price drops) will meaningfully improve affordability wtop.com. Buyers who have been on the sidelines may slowly trickle back if mortgages dip under 6%, but the fall market is expected to remain subdued by historical standards.

Retail & Mixed-Use: A worrying trend emerged in U.S. retail real estate: for the first time since 2020, more retail space is being vacated than leased. In the first half of 2025, retailers gave up a net 15 million square feet nationwide frostbrowntodd.com. This negative net absorption spanned two consecutive quarters – a back-to-back pullback not seen since the pandemic trough frostbrowntodd.com. The culprit is a combination of factors. Consumer spending, especially on discretionary goods, has softened amid economic uncertainties and inflation, leading some stores to shutter or shrink. New import tariffs have also raised costs for sectors like apparel and electronics, squeezing retailers’ margins and appetite for space frostbrowntodd.com. Retail vacancy rates in the U.S. ticked up slightly to 4.9%, though notably this is still below long-term averages frostbrowntodd.com. And one silver lining: new retail construction has nearly ground to a halt (Q2 2025 saw the lowest quarterly retail development total since at least 2000), which may prevent a glut and help stabilize occupancies going forward frostbrowntodd.com. The retail sector is clearly “entering a period of uncertainty” marked by “declining tenant demand and economic pressures,” as a Real Assets Adviser analysis observed frostbrowntodd.com. Landlords of shopping centers and malls face rising challenges to fill space, and some may need to get creative with experiential tenants or even repurposing retail into other uses if vacancies creep up.

On the flip side, mixed-use development in hot Sun Belt markets continues almost unabated. In Arizona, developers just unveiled plans for “Legacy Park,” a 9.4 million-square-foot megaproject in suburban Phoenix that illustrates the enduring appeal of high-growth metros costar.com. The project, announced by Vestar on Sept. 17, will transform 200 acres of Mesa’s East Valley into a new urban hub. The first phase alone (costing over $1 billion) will deliver a 300,000 sq. ft. open-air shopping district with chef-driven restaurants, 700 upscale apartments above the retail, a 600-room resort hotel, and 3.4 million sq. ft. of offices – all centered around a 20-acre park and lake for community events costar.com azbigmedia.com. Billed as a “generational” project, Legacy Park aims to bring a Scottsdale-like luxury environment to a fast-growing area currently short on high-end amenities azbigmedia.com. It’s slated to break ground in 2027, with build-out over 20 years azbigmedia.com. Notably, this massive venture is moving forward despite a nationwide cooldown in new retail construction, underscoring Phoenix’s unique growth story costar.com. Vestar’s CEO David Larcher said the development will “set a new benchmark for retail, hospitality and mixed-use living in Arizona,” and city officials project it will create 20,000 jobs and $56 billion in economic output over its lifespan azbigmedia.com azbigmedia.com. The Phoenix metro’s strong population and job gains – plus relatively business-friendly environment – are continuing to draw bold real estate investments, even as higher interest rates have stymied projects elsewhere.

North of the border in Canada, an unusual saga is unfolding from what was Quebec’s largest-ever land deal. Developer Luc Poirier made headlines in 2021 for selling a vast 8.7 million m² tract (over 2,000 acres) of land near Montreal to the Quebec government for C$240 million, earmarked for a mega battery factory project. Now, with that factory plan having fallen apart, Poirier is asking to buy back the land for the same price he sold it costar.com costar.com. The site – a former industrial zone south of Montreal – was originally acquired by Poirier for just C$20 million in 2015 costar.com. He had envisioned a housing development there, but sold to the province when an EV battery plant was proposed. With the manufacturing deal scuttled, Poirier has publicly offered to repurchase the empty land and potentially revive housing plans costar.com. It’s a striking scenario that underscores how shifts in industrial strategy (and government intervention) can upend local real estate. Quebec’s decision now could either return a huge swath of land to private development or seek new industrial suitors – a dilemma being closely watched by Canadian developers and policymakers.

Office & Commercial: The commercial real estate mood in North America is cautiously improving – especially in the office sector, which has been battered by remote work. Recent data from CBRE and others show that positive office space absorption is back in many cities frostbrowntodd.com. Tenants have gradually begun expanding footprints again rather than just contracting, helping nudge vacancy rates down in select markets. And while older, lower-quality offices are still struggling (over 70% of U.S. Class B/C buildings are trading at double-digit cap rates, indicating distressed values), there are hints the worst may be over even for these laggards frostbrowntodd.com. The share of buildings seeing extremely high cap rates dipped slightly in early 2025, and a “modest decline” in those figures “suggests that the worst might be over for some parts of the market,” with a tentative recovery in investor sentiment possibly beginning frostbrowntodd.com frostbrowntodd.com. As one industry roundup put it, “the office real estate sector is showing early signs of recovery”, with improving fundamentals and even some yield compression on riskier assets frostbrowntodd.com.

However, landlords are also learning hard lessons from the pandemic: many now question the ROI of lavish perks and amenities that became fashionable to lure workers back. In a British Council for Offices (BCO) survey, corporate occupiers said location and transit access outweighed gimmicky amenities in defining a “super prime” office space costar.com costar.com. This suggests that while modern tenants still value quality (and some extras like gyms or rooftop terraces), there is a pullback from the “peak amenity” craze. Post-COVID, sustainability and cost-efficiency have become bigger priorities; both tenants and landlords are focusing on energy savings, healthy indoor environments, and rightsizing their space rather than just packing in more bells and whistles costar.com. In practice, this means new office developments in North America and Europe may tone down the extravagant perks (like golf simulators or whiskey lounges) and double down on fundamentals – prime location, green building features, flexible floorplates, and good air circulation – that truly drive tenant demand and justify rent premiums.

Europe

Across Europe, real estate markets in mid-September 2025 reflected a mix of recalibration and resilience. Interest rates have stabilized after an active tightening cycle – the ECB on Sept. 11 kept its deposit rate unchanged, pausing after a series of hikes. This steady stance, combined with nascent economic recovery signs, has started to improve investor outlook. In Germany, for instance, institutional investors see growing value in today’s pricing. An annual survey by Universal Investment found that 38% of major German investors now consider domestic property prices low or fair (versus just 18% a year ago) costar.com. For Europe as a whole, half of respondents said prices are fair/low – a big jump from 29% previously costar.com. Virtually none of those surveyed deemed European real estate “unacceptably high” priced anymore costar.com. This shift implies that after the price corrections and yield expansions of 2022–2024, Europe’s property assets are looking attractive again, potentially priming the pump for increased acquisition activity by pension funds, insurers, and other institutional players.

Commercial real estate performance in Europe is showing pockets of strength. In the office sector, while vacancy rates remain elevated in some cities, leasing volume is recovering. JLL reported that H1 2025 global office leasing was at its highest since 2019, led by Asia-Pacific but with Europe only slightly down due to longer deal cycles jll.com. Crucially, new supply is pulling back sharply: groundbreakings in Europe are at their lowest level in over a decade, which alongside falling U.S. construction, should help office vacancies peak and begin declining later this year jll.com. Occupiers seeking high-quality space in Europe’s big cities now face less upcoming competition from new builds, so competition for top-tier (“Grade A”) offices is expected to intensify. “With less new space coming to market, occupiers with large requirements will need to explore options earlier as competition for the best space intensifies,” JLL noted jll.com jll.com.

One emerging trend in London and other UK cities is a more sober approach to office amenities. During the height of the post-pandemic return-to-office push, developers touted ever-flashier features – concierge services, rooftop running tracks, extravagant lobby designs – to entice workers. Now, sustainability and cost concerns are cooling that arms race costar.com. Many British landlords find tenants are satisfied with a solid baseline of amenities (good coffee, fitness facilities, maybe a terrace), and don’t necessarily need a dozen different novelty perks. A survey linked to the British Council for Offices found “location” was by far the top factor defining a prime office, with amenities secondary costar.com. In practice, this means central, well-connected offices that are energy-efficient and healthy may lease up faster than fringe locations that boast fancy perks but require a commute. It’s a subtle recalibration of how “value” in offices is perceived – one likely to influence future refurbishments and developments Europe-wide.

Retail and hospitality real estate offered positive news in Western Europe. Paris saw a vote of confidence in its prime retail corridor: RH (Restoration Hardware), a U.S. luxury furniture retailer, opened a flagship gallery on the Champs-Élysées on Sept. 17 costar.com. The expansive store – seven levels of upscale home furnishings integrated with two restaurants, a rooftop bar, and a design library – is a major investment by RH and by the building’s owner, Immobilière Dassault costar.com. The concept blurs retail with hospitality and experience, as shoppers can dine and linger in exquisitely designed spaces. The move underscores that marquee global brands still covet high-street European locations, betting on tourist and local spending at the top end. Paris’s retail fundamentals support this confidence: consumer foot traffic and sales in luxury corridors have been robust in 2025, buoyed by returning international tourists (including high-spending visitors from the U.S. and Middle East) and a wealthy local clientele. Prime retail rents in Paris have remained resilient, and the successful launch of RH’s gallery – drawing throngs of design aficionados and diners – may encourage other brands to invest in experiential flagships in major European cities.

Elsewhere, Southern Europe’s hospitality sector is thriving on tourism. Spain, Italy, and Greece all reported near-record summer travel numbers, translating to high hotel occupancies and investor interest in resorts. For example, Greece has seen a boom in luxury hotel developments in Mykonos and Santorini, and reports indicate Mediterranean resort assets are trading at yields compressing again as buyer demand outstrips limited trophy supply. In the logistics/industrial sector, European markets remain relatively tight. Prologis’s European Logistics Rent Index hit all-time highs mid-2025, though rent growth has moderated. An update from DAA Capital Partners noted that European logistics vacancies may trend down toward year-end 2025 because the development pipeline is shrinking – indicating the sector is in “recalibration, not retreat” daacap.com. Indeed, after a multi-year warehouse construction boom, developers have pulled back given higher financing costs and economic uncertainties. Yet e-commerce and 3PL (third-party logistics) occupiers continue to seek modern facilities, especially around major cities. This dynamic supports stable or rising rents for top-grade warehouses, even as capital values fell in 2023. Now, with yields stabilizing, some investors see 2025–26 as an opportunity to acquire European logistics at a relative discount before growth picks up again.

Investment flows: Cross-border capital into Europe is inching upward. JLL data showed EMEA real estate investment totaled $49 billion in Q2 2025, up 6% year-on-year jll.com. Notably, intra-European and foreign investors consider 2025 a turning point – recent deals include Middle Eastern sovereign wealth funds increasing allocations to London offices and German open-ended funds quietly buying retail parks in Spain and Italy. The euro’s relative weakness against the dollar has made European assets more affordable for dollar-peg investors. As inflation in Europe cools and if the ECB begins cutting rates in 2026 (as futures predict), a further demand surge for European properties is possible. For now, investors are selective: core assets in the best locations are favored, while secondary assets or those with ESG issues (e.g. needing retrofits for energy efficiency) still trade at a discount. Overall, Europe’s major real estate sectors appear to be finding a floor after a volatile few years, setting the stage for a potential rebound in 2026 if economic conditions improve.

Asia-Pacific

Real estate developments across Asia-Pacific in mid-September 2025 reflected the region’s multi-speed recovery and persistent challenges in China. The starkest news comes from China’s property market, which continues to struggle under the weight of its years-long downturn. Official data for August showed new home prices in China fell 0.3% from the prior month, matching July’s decline reuters.com. It was the fourth straight month of falling prices, extending a weak trend that began in mid-2023 reuters.com. On an annual basis, new home prices are down ~2.5% nationally reuters.com. Sales volumes and property investment are also deeply depressed (investment fell 12.9% year-on-year in Jan–Aug) reuters.com. The once-mighty Chinese developers are in various stages of distress or restructuring, with giants like Evergrande and Country Garden capturing headlines due to liquidity crises.

Policymakers in Beijing are responding with incremental support measures, though so far these have not turned the tide. In recent weeks, several big cities including Shanghai and Shenzhen eased homebuying restrictions – for example, by treating more families as first-time buyers eligible for lower mortgage rates, and by removing caps on purchases in certain districts reuters.com. Mortgage rates have also been cut: the PBOC trimmed benchmark rates and guided banks to lower existing mortgage rates for first-home loans starting October. Yet consumer confidence remains fragile. Would-be homebuyers worry about developers failing to complete projects and about falling prices eroding their investment. “Weak income expectations, elevated unemployment pressures, and high listings on the secondary market continue to dampen buyer sentiment, particularly in smaller cities with high inventory,” analysts note reuters.com. Zhang Dawei, a chief analyst at Centaline, observed that China’s housing market faces “significant adjustment pressure” in the near term, and he expects authorities will need to roll out “forceful measures to stabilize” the sector reuters.com. Those could include further loosening of home purchase curbs, easier credit (lower down payments, mortgage discounts), and even an interest rate cut to the Loan Prime Rate – something widely expected at the PBOC’s Sept. 20 decision reuters.com. Indeed, many economists predicted a cut to the 1-year LPR to help reduce borrowing costs for both developers and homebuyers reuters.com. If that materializes, it would signal a more aggressive stance to arrest the slide. The next few months are crucial: most analysts polled by Reuters don’t foresee China’s home prices bottoming out until at least 2H 2026 or 2027 reuters.com, meaning the road to recovery is long unless confidence can be restored sooner.

Outside of mainland China, Asia-Pacific real estate has been relatively resilient and is even rebounding in certain segments. One standout is the hospitality sector in key Asia-Pacific markets. According to a new JLL report, investment in Asia-Pacific hotels reached $4.7 billion in H1 2025 worldpropertyjournal.com. That volume is down about 23% from the frenzied pace of H1 2024 worldpropertyjournal.com, but importantly, deals are still happening – just more selectively. Investors have focused on a handful of “gateway” countries: Japan, Greater China (Mainland + Hong Kong), Australia, Singapore, and South Korea together made up 84% of all hotel investment in the region worldpropertyjournal.com. The dominance of these five markets highlights a “flight to safety” amid global uncertainty. Japan alone led with $1.5 billion in hotel trades, as international and domestic investors alike are bullish on its tourism recovery and ultra-low financing costs worldpropertyjournal.com. Meanwhile, emerging markets saw limited action (only 16% of volume was spread across all other APAC countries) worldpropertyjournal.com.

Investors are gravitating to established cities with proven tourism demand and liquidity. “Investors are gravitating to gateway cities where fundamentals remain strong, but decision-making timelines have lengthened,” JLL’s Nihat Ercan noted worldpropertyjournal.com. Higher interest rates and divergent price expectations have led to extended due diligence periods – buyers are more cautious and want discounts, while many sellers haven’t fully adjusted pricing, resulting in longer negotiation periods worldpropertyjournal.com. Still, deals are getting done. For example, Thailand saw robust hotel activity: $301 million was invested in Thai hotels in H1, mostly by local buyers, and JLL expects Thai hotel volume to exceed $650 million by year-end worldpropertyjournal.com. Hotel performance metrics are broadly improving: Tokyo’s occupancy climbed back above 80%, near pre-COVID levels (and ADRs in Tokyo now exceed 2019’s), Singapore’s hotel rates are above pre-pandemic levels, and Sydney’s occupancy is approaching 80% with stable rates worldpropertyjournal.com. Bangkok is a bright spot – despite a 6% YoY dip in tourist arrivals in early 2025, Bangkok’s ADRs (average daily rates) are significantly above prior peaks, thanks to strong domestic travel and high-end international visitors worldpropertyjournal.com.

Private capital is increasingly active in APAC hotels. JLL notes that private equity funds and high-net-worth individuals have upped their allocations to hospitality – PE investment in hotels was up 6% YoY, and HNWIs invested 54% more in H1 2025 vs H1 2024 worldpropertyjournal.com. These buyers often have more flexible mandates and are drawn to the post-COVID recovery story in travel. They’re targeting top-tier assets in markets like Tokyo, Sydney, or Bangkok that promise both defensive income and eventual growth. The long-term outlook is optimistic: APAC international arrivals rose 12% in Q1 2025, supporting hotel revenue per available room growth and bolstering confidence worldpropertyjournal.com. JLL forecasts total APAC hotel transactions could hit $12.8 billion in 2025, a modest uptick from 2024 worldpropertyjournal.com. The second half of 2025 is expected to see a flurry of deal closures (some previously delayed), as sellers get more realistic and buyers seize “compelling entry points” in the market worldpropertyjournal.com. “The latter half of 2025 offers compelling entry points for strategic investors,” Ercan said, predicting that private equity, family offices, and regional operators with local expertise will lead the charge in snapping up assets that can unlock value through hands-on management worldpropertyjournal.com.

In the industrial/logistics realm, Asia-Pacific is experiencing a healthy recalibration. After years of breakneck expansion, industrial leasing has moderated in 2025 as occupiers take a breath. JLL observed that industrial leasing activity slowed across regions in Q2 – companies are being cautious, seeking shorter leases and flexibility amid shifting trade policies jll.com. The U.S.-China trade frictions and tariff uncertainties have particularly made some APAC manufacturers and logistics firms delay long-term decisions jll.com. However, the dip is uneven: demand from sectors less affected by trade tensions (like 3PLs, e-commerce fulfillment, and data centers) remains robust in many APAC markets jll.com. Supply chain reconfiguration (e.g. “China+1” diversification) is ongoing, benefitting markets like Vietnam and India for industrial growth. Overall, vacancy rates in prime APAC logistics hubs are low – often under 5% – and rental growth is slowing but still positive in most cities. As an example, Singapore and Sydney are seeing continued rent increases as supply is scarce, whereas Shanghai and Shenzhen have flat rents due to abundant new warehousing coming online. A new “Friction Index” by Vistra highlighted how operational barriers (like labor shortages and regulatory hurdles) are shaping the region’s $131 billion real asset boom in logistics vistra.com, suggesting governments that streamline business will attract more facility investments.

Emerging markets in Asia are also making news. In India, real estate developers are cheering the recent surprise interest rate cut by the central bank (RBI) in August, which should reduce financing costs for construction. India’s top listed property firms report strong residential sales in 2025, fueled by the country’s robust GDP growth (~6%) and a growing middle class. Southeast Asia saw a notable event: Singapore’s real estate investment market got a $12 billion boost in Q2 2025, driven largely by U.S. private equity funds pouring money into Singaporean office towers and data centers perenews.com sg.news.yahoo.com. According to a report by Colliers, Asia-Pacific cross-border investment was led by U.S. capital targeting markets like Australia, Japan, and Singapore, with U.S. investors accounting for a $42 billion surge in APAC real estate investment in Q2 wam.ae. This underscores that while local dynamics vary, global investors still view Asia-Pacific – with its relatively higher growth rates – as an attractive destination, especially now that valuations have corrected somewhat since 2021’s peaks.

In Japan, the prospect of the Bank of Japan eventually raising interest rates (for the first time in years) is being closely watched. For now, Japan remains an ultra-low-rate environment, and J-REITs have been actively acquiring assets, from apartment blocks in Tokyo to logistics facilities, taking advantage of cheap debt. Australia’s residential market is rebounding quickly after a shallow correction – prices in Sydney and Brisbane are climbing again, prompting the Reserve Bank of Australia to warn about housing affordability even as it holds rates steady. Asia-Pacific capital markets more broadly saw a cautious uptick: Colliers’ September 2025 Global Capital Flows report shows “cautious growth” in real estate investment, with APAC leading other regions aprea.asia. Resilient domestic liquidity (like Japan’s banks lending freely, and Singapore’s government-linked funds investing locally) has helped APAC weather global volatility.

One cautionary tale is Hong Kong’s commercial property slump, which continued through 2025. Office rents in Hong Kong’s Central district are down significantly from pre-2019 levels, and several large transactions fell through as buyers and sellers couldn’t agree on price. However, even Hong Kong showed a glimmer of hope: by Q3 2025, foreign investors – including some mainland Chinese firms and global opportunistic funds – began quietly accumulating Grade B office buildings at steep discounts, betting on a longer-term recovery. In summary, Asia-Pacific’s real estate landscape in September 2025 is one of strategic patience and targeted bets: investors and occupiers are being selective, but opportunities in high-quality assets and markets with structural growth (like data centers, logistics, and select hospitality) continue to draw capital.

Middle East

The Middle East property market is in a dynamic phase, characterized by blockbuster deals and strategic pivots. In the Gulf region, buoyant economic conditions (helped by high oil revenues until 2023 and ongoing diversification drives) have kept real estate activity strong, especially in the UAE and Saudi Arabia.

A headline-grabbing development on Sept. 17 was Dubai Investments’ announcement to IPO its real estate arm, Dubai Investments Park (DIP) moderndiplomacy.eu. Dubai Investments Park is a vast integrated community in Dubai, encompassing industrial parks, warehouses, offices, and residential complexes across 2,300 hectares moderndiplomacy.eu. By listing up to 25% of DIP on the stock market, parent company Dubai Investments PJSC hopes to unlock value and raise potentially hundreds of millions of dollars (valuing DIP as high as $2.5 billion) moderndiplomacy.eu moderndiplomacy.eu. This comes on the heels of a flurry of successful IPOs in the UAE’s real estate and infrastructure space – including Dubai’s Empower (district cooling firm), DEWA (utilities), and various REITs and developers that have floated in the past two years to heavy investor demand. The DIP IPO plan reflects surging investor confidence in Dubai’s property sector, underpinned by the city’s rapid population growth, record tourism, and pro-business initiatives. If it proceeds in Q1 2026 (as targeted), DIP’s listing could set a benchmark for more family-owned conglomerates and developers in the Gulf to tap public markets moderndiplomacy.eu. Analysts note it also provides global investors a new vehicle to gain exposure to Dubai’s booming industrial and logistics real estate – a sector benefiting from the region’s push to become a trade and e-commerce hub.

Why does it matter? Dubai’s real estate market, once prone to volatility, is currently in a strong upcycle. Property sales hit record highs in 2025, supported by an influx of foreign buyers (from Europeans fleeing high taxes to wealthy Russians and Asians seeking a safe haven), and by government policies like 10-year “golden visas” for property investors. The DIP IPO can be seen as both capitalizing on this momentum and testing the market’s depth. It’s expected to draw keen interest from regional institutional investors and possibly international frontier market funds. If the valuation achieves the upper end ($2.5 billion), it would mark one of Dubai’s largest real estate IPOs in recent memory, sending a signal that liquidity and appetite remain abundant. The proceeds could allow Dubai Investments to pay down debt or reinvest in new projects, further fueling growth. More broadly, the Gulf’s IPO boom is solidifying the region’s status as an emerging financial market heavyweight – in 2022–25, the Middle East accounted for a disproportionate share of global IPO proceeds, and that trend seems intact.

Over in Saudi Arabia, the real estate narrative is centered on its “giga-projects” – multi-city, multi-year developments that are central to the Vision 2030 plan to diversify the economy. These include well-known ventures like NEOM (a $500 billion high-tech city in the northwest desert), The Red Sea Project (luxury island resorts), Qiddiya (an entertainment city near Riyadh), and others. A report from CoStar on Sept. 17 noted that the pace of investment in these giga-projects has slowed in 2025 costar.com. A few years ago, Saudi Arabia unveiled sweeping plans and poured initial funding into these initiatives. But as of 2025, cost inflation and lower oil prices have forced some recalibration costar.com. Simply put, building whole new cities is enormously expensive and logistically complex – doing many simultaneously even more so. Saudi’s Public Investment Fund (PIF) is financing much of this, and while PIF is one of the world’s richest sovereign funds, it has had to prioritize and sequence projects amid global economic uncertainty. Some reports suggest NEOM’s most fantastical elements (like the 170km-long “The Line” city of mirrors) may be scaled back or delayed. The CoStar brief indicated construction deferrals and rollouts stalled on certain components as the government reassesses timelines costar.com. Notably, the price of oil – which dipped in 2024 and early 2025 – has constrained Saudi’s fiscal space to some extent, making it careful not to overextend.

However, it’s crucial to stress Saudi Arabia’s commitment to these projects remains firm – they are cornerstone to Crown Prince Mohammed bin Salman’s vision for a post-oil economy. The slowdown likely means re-phasing: focusing on the most viable and near-term ROI elements first (for example, completing some luxury Red Sea hotels which can start generating tourism revenue, or finishing key infrastructure in NEOM’s first district). Already, parts of the Red Sea Project (like a new international airport and the first few island resorts) are opening in late 2025, and NEOM’s massive port and industrial city (Oxagon) has inked partnerships with global firms. The “stall” is therefore relative – activity is still ongoing, just at a moderated pace. Importantly, Saudi’s domestic real estate market – separate from these giga-projects – is robust. Housing demand in Riyadh and Jeddah far exceeds supply, leading the government to invest in affordable housing (the Saudi Housing Co. aims for 300,000 new homes, with 60,000 in Jeddah alone) agbi.com. The kingdom’s homeownership rate hit 65% (their 2025 target) a year early arabnews.com, reflecting a building spree of villas and apartments for Saudis. Office space in Riyadh is also tight, with rents rising as the government relocates companies to the capital. So, while the glittering mega-projects may see timing tweaks, everyday real estate in Saudi Arabia – housing, commercial, retail – is strong, supported by government stimulus and a young, growing population.

Elsewhere in the Middle East, Qatar’s real estate also made news. Reports showed that real estate sales in Qatar totaled QR 394 million (~$108 million) in just the first week of September, indicating a notable uptick in transaction activity arabnews.com. Much of this was land and villa sales as Qatar’s market adjusts post-World Cup. Abu Dhabi saw the launch of several new waterfront developments as it tries to share some limelight with Dubai – Aldar Properties unveiled a $1.4 billion project on Saadiyat Island, betting on luxury second-home buyers. Egypt, bridging Middle East and Africa, had that significant rent control reform (see Africa section), as well as ongoing challenges with inflation impacting construction costs.

In the leasing market of the Middle East, office and retail segments in the Gulf are thriving. Dubai’s office occupancy is at multi-year highs, with Grade A offices in DIFC and Downtown enjoying record rents as financial and tech firms flock in. In Riyadh, office vacancies are near zero in prime areas, which has led to a surge in development of new office towers (often by PIF-linked entities) to accommodate demand from multinational firms moving regional HQs to Saudi under its “HQ initiative”. Retail in the GCC is similarly buoyant: footfall and sales in major malls in Dubai, Abu Dhabi, and Doha exceed pre-pandemic levels, thanks to population growth and tourism. As evidence, Dubai’s biggest mall operator, Emaar Malls, reported a 20% jump in tenant sales in H1 2025 and is nearly fully leased. Luxury retailers are expanding presence in Gulf malls (e.g., Dubai Mall added new flagship boutiques for several French and Italian fashion houses this year). This contrasts with much of the Western world where retail is under pressure – highlighting the Gulf’s unique position of economic momentum and relatively underpenetrated retail space per capita (in some markets).

Another significant development: initial steps toward REIT markets in new territories. On Sept. 18, Oman approved regulations to allow real estate investment trusts, aiming to mirror the success of REITs in Dubai and Saudi. This could open Oman’s property sector (which includes tourism resorts and new industrial ports) to wider investment.

Africa

Africa’s real estate landscape during this period shows a mixture of policy-driven shifts, foreign investment interest, and local growth initiatives.

In North Africa, Egypt’s move to abolish long-standing rent controls is arguably the most consequential change in housing policy in decades. For context, Egypt has had rent control since the 1960s that froze rents on many apartments – some families have been paying just a few Egyptian pounds a month for downtown Cairo flats, unable to be evicted due to inherited leases. Now, the government – under President Sisi, and nudged by IMF recommendations – has enacted a law to phase out these “old rent” contracts over seven years stimson.org. After that, landlords can charge market rates. This reform will affect millions of households who for generations have relied on token rents. Understandably, it has sparked concerns: overnight rent hikes could be astronomical (from $1 to, say, $200 per month in some cases), and while tenants have years to prepare, many are low or middle income who fear eventual displacement. Critics of the plan warn it “risks evictions and price shocks” in a country already grappling with 35% inflation and economic hardship stimson.org. The government says it will expand social housing to cushion the blow and is touting a parallel program to construct hundreds of thousands of subsidized housing units. The success of those measures remains to be seen. For the real estate market itself, ending rent control could unlock a wave of property renovations and investments – many controlled apartments have been poorly maintained due to low returns. As units gradually convert to market rate, landlords may finally have incentive (and capital) to refurbish old buildings, which could improve cityscapes. It may also spur more multi-family development by the private sector, seeing a more functional rental market emerge. However, much hinges on implementation: doing it gradually and providing alternative housing for vulnerable tenants will be key to avoiding social upheaval.

In sub-Saharan Africa, South Africa offers a rare positive story. The Cape Town Central City Improvement District (CCID) released its annual report on Sept. 17, showing a robust rebound in the city’s downtown economy bizcommunity.com. The report tallied R9.03 billion ($480 million) in property investment in the CBD during the past fiscal year, a substantial increase from the previous year bizcommunity.com. This includes projects completed, under construction, and in planning – 27 developments in total, ranging from residential towers to mixed-use complexes bizcommunity.com. Notably, 12 of these were pure residential developments, highlighting the rising demand for urban living in Cape Town bizcommunity.com. The city has seen an influx of young professionals and semi-gration (people relocating from other parts of South Africa for lifestyle and safety), fueling the need for downtown apartments. The CCID report highlighted that all major economic sectors in the CBD – hospitality, tourism, retail – showed resilience or growth despite South Africa’s overall “lukewarm” economy bizcommunity.com. For example, the number of retail businesses downtown actually increased year-on-year bizcommunity.com bizcommunity.com, and two new upscale hotels are under construction as Cape Town’s tourism has become year-round rather than seasonal bizcommunity.com.

Rob Kane, who leads the CCID, lauded the confidence developers are showing: “All the big players in property development are prepared to invest in the Cape Town CBD. We’re getting more interest from national and international investors, too,” he said bizcommunity.com bizcommunity.com. This vote of confidence is visible – both South African property funds and some foreign investors (from Europe, Middle East) have been buying or developing in Cape Town, attracted by its global city appeal, relative safety, and solid governance compared to other SA metros. The CCID pointed out that a virtuous cycle is at work: “Ultimately, more buildings mean more people, which translates into a busy, bustling, vibrant area, and augurs well for the day- and nighttime economies,” Kane noted bizcommunity.com. Essentially, as more people live and work downtown, businesses thrive, which in turn encourages further property investment – a bright spot in a country that has faced economic stagnation and power outages (load-shedding) hampering many industries.

Elsewhere in Africa, Nigeria – the continent’s most populous nation – hosted the African Real Estate Society (AfRES) annual conference in mid-September, and experts there underscored a critical issue: the lack of reliable data is hurting real estate growth punchng.com punchng.com. Nigeria has an oft-cited housing deficit (20+ million units) but, as AfRES speakers pointed out, these figures are outdated and not grounded in granular data. “The real problem is not simply a shortage of houses but the absence of context-driven, affordable housing data,” said Omokolade Akinsomi, president of the International Real Estate Society punchng.com. Without good data, it’s hard to attract investment or craft policy – banks can’t accurately price mortgages, developers can’t pinpoint where demand is highest, and investors remain wary. The conference called for better collaboration to create data hubs and for integration of African property markets (including a proposed “global Black network” linking Africa with diaspora markets) punchng.com. While not a headline-grabbing development like an IPO, this focus on market transparency is notable – global investors in real estate have long required clear title, market stats, and regulatory stability. African markets improving on these fronts could unlock significant capital. Currently, most foreign real estate investment in Africa goes to a handful of countries (South Africa, Kenya, Morocco, Egypt, Nigeria), but even there, data is patchy.

Some African markets are quietly performing well. Kenya: A Kenyan property report highlighted that Kenya is outpacing many international markets in 2025, with prime off-plan developments yielding returns above 18% biznakenya.com. Nairobi’s office and retail segments are stabilizing, and industrial parks around Nairobi are expanding thanks to infrastructure improvements (like the Standard Gauge Railway to Mombasa). West Africa: Ghana and Ivory Coast are seeing new mall and office builds backed by South African and French investors, banking on rising middle-class consumption. Southern Africa beyond SA: Namibia’s Walvis Bay port expansion has led to a mini real estate boom there for logistics facilities.

Finally, a trend worth noting is adaptive reuse and sustainability initiatives. In South Africa, leading developers like Atterbury are converting old office buildings in Pretoria and Joburg into apartments or student housing to address oversupply of office and undersupply of housing atterbury.co.za. Green building is also taking root – Nairobi opened its first net-zero energy office building this year, and Cape Town has several large solar-powered commercial buildings. Such projects not only advance environmental goals but can tap international green financing.

In summary, September 17–18, 2025 saw a flurry of significant developments across the globe’s real estate markets. From central bankers’ rate decisions in Washington and Brasília, to IPO plans in Dubai, policy reforms in Cairo, and mega-project rethinks in Riyadh, the real estate sector is both responding to and influencing broader economic currents. For industry professionals, investors, and analysts, these days underscored a few key themes:

  • Monetary policy is pivotal: The Fed’s easing and emerging markets’ different stances (Brazil holding firm, Indonesia surprising with a cut reuters.com) will directly impact financing costs, cap rates, and development pipelines across regions. Real estate players are watching central banks as closely as ever.
  • Sector bifurcation: Residential markets hinge on affordability and mortgages; commercial sectors like retail and office are at different points of their cycle (with retail soft in the U.S. but robust in the Middle East, offices recovering unevenly); industrial/logistics remain relatively strong but not uniform.
  • Investor sentiment is turning cautiously positive: The sense of “market bottom” is emerging in places like Europe, where valuations finally look reasonable, and in U.S. offices perhaps. Cross-border capital is tiptoeing back in, as evidenced by deals and surveys.
  • Big bets and bold strategies: Whether it’s Dubai taking companies public to capitalize on hot markets, or Saudi recalibrating how to execute visionary plans, or African cities implementing reforms, real estate is at the heart of economic strategy. Property remains one of the most tangible indicators of confidence – when cranes are on the skyline (or not), it speaks volumes about where a city or country is headed.

Industry experts are both realistic and hopeful. As one commercial real estate veteran quipped in a recent Trepp podcast, navigating this period requires “getting in early with a deep understanding and thinking creatively” frostbrowntodd.com frostbrowntodd.com. The landscape is complex – interest rates, structural changes like work-from-home, and geopolitical risks all present challenges. Yet the opportunities are emerging: from Phoenix’s megaproject to Cape Town’s boom, Mexico’s ultra-luxury resort to Germany’s investor re-entry, savvy players are positioning for the next growth cycle. The second half of 2025 and into 2026 could well be a turning point when we look back, as global real estate adapts to a post-pandemic, higher-rate world and finds its new equilibrium.

Sources:

wtop.com wtop.com Federal Reserve delivers first rate cut since 2024 (0.25%) and signals two more by year-end, reflecting concerns over U.S. job market wtop.com. Mortgage rates, which had eased in anticipation, hit ~6.35% – an 11-month low wtop.com. However, further drops aren’t guaranteed, warns Bright MLS economist Lisa Sturtevant: with inflation still a risk, “it’s possible we could see rates rise” even after the cut wtop.com.

worldpropertyjournal.com worldpropertyjournal.com U.S. homebuilder sentiment (NAHB index) stayed at a weak 32 in September (unchanged from August), but builders’ six-month sales outlook climbed to 45, highest since March, amid hopes that Fed rate relief will boost housing worldpropertyjournal.com. “While builders continue to contend with rising construction costs, a recent drop in mortgage interest rates should help spur demand,” said NAHB Chairman Buddy Hughes worldpropertyjournal.com. NAHB’s chief economist added that lower rates and an expected Fed cut will ease financing costs for developers as well worldpropertyjournal.com.

frostbrowntodd.com frostbrowntodd.com The U.S. retail real estate sector hit a post-pandemic inflection point: Q1–Q2 2025 marked the first consecutive quarters of negative net absorption (space vacated exceeded space leased) in retail since COVID frostbrowntodd.com. Roughly 15 million sq. ft. of retail space was vacated in H1 2025, amid weaker discretionary spending and economic uncertainty frostbrowntodd.com. Vacancies ticked up to 4.9% (still below historical averages) and new retail construction slowed to its lowest level in decades frostbrowntodd.com. Key takeaway: retail faces a period of uncertainty with softening tenant demand and potential vacancy rises frostbrowntodd.com.

frostbrowntodd.com frostbrowntodd.com Office real estate is tentatively stabilizing. A CBRE analysis noted that positive net absorption of office space has returned in most markets, and more tenants are again looking to expand footprints – good signs for improving income frostbrowntodd.com. While lower-quality offices remain stressed, data from H1 2025 show a slight drop in the share of buildings with ultra-high cap rates, suggesting the worst may be over for parts of the office market frostbrowntodd.com. Key takeaway: “The office sector is showing early signs of recovery. Increasing demand, shrinking yields for some riskier assets, and improving fundamentals imply investor confidence may be thawing,” potentially signaling stabilization for even marginal assets frostbrowntodd.com.

moderndiplomacy.eu moderndiplomacy.eu Dubai Investments unveiled plans to IPO its real estate arm Dubai Investments Park (DIP), a 2,300-hectare mixed-use industrial park and community. The offering, expected in Q1, could value DIP up to $2.5 billion moderndiplomacy.eu and involve up to 25% of shares. DIP houses 160,000 residents and 5,000 companies in a massive development with industrial, commercial, and residential components moderndiplomacy.eu. This move rides a wave of successful UAE property listings and highlights strong investor confidence in Dubai’s booming real estate market (buoyed by population growth, tourism and pro-investment policies) moderndiplomacy.eu moderndiplomacy.eu.

costar.com Saudi Arabia’s “giga-projects” – the multi-city developments under Vision 2030 – are encountering a reality check. “The pace of investment in developing vast swaths of Saudi Arabia as part of its Vision 2030 ambitions has slowed in 2025,” as cost inflation and low oil prices prompt re-evaluation costar.com. Years after launching massive plans to build futuristic cities and resorts, rollouts have stalled on some projects, with construction deferrals emerging costar.com. Officials remain committed to diversifying beyond oil, but timelines for NEOM and other mega-developments are being extended as the kingdom recalibrates spending.

stimson.org stimson.org Egypt passed a landmark reform to end decades-old rent controls. The government will phase out very low “old rent” contracts (some dating back to the 1960s) over seven years, affecting millions of households as landlords will eventually be allowed to impose market rents stimson.org. Critics warn this IMF-endorsed change – which will “allow steep rent hikes” – could lead to evictions and rent shocks, “despite government pledges to expand low-cost housing” as a buffer stimson.org. The reform is part of broader economic changes but raises social concerns in a country where affordable housing is already scarce.

bizcommunity.com bizcommunity.com Cape Town, South Africa is enjoying a development boom. A new report shows R9.03 billion (~$480 M) in property projects in the Cape Town CBD in 2024/25, up sharply from R7.3 B the prior year bizcommunity.com. 27 developments (residential, mixed-use, hotels) are recently completed or underway, reflecting investor confidence in the city’s future bizcommunity.com. “All the big players in property development are prepared to invest in the Cape Town CBD… we’re getting more interest from national and international investors, too,” said Rob Kane, head of the Central City Improvement District bizcommunity.com. He noted that “more buildings mean more people,” fueling a vibrant downtown economy – a positive sign of urban revival bizcommunity.com.

globenewswire.com globenewswire.com Mexico’s Riviera Nayarit will soon welcome a new pinnacle of luxury real estate. Developer Thor Urbana announced Siari, a Ritz-Carlton Reserve Residences & Hotel project on a 900-acre oceanfront enclave, is nearing delivery with first homes ready by late 2025 globenewswire.com. Siari features 34 ultra-premium residences and a 90-room Ritz-Carlton Reserve hotel carved into jungle cliffs, blending eco-conscious design with high-end amenities globenewswire.com. “With Siari, we are crafting a nature-driven residential experience that blends the region’s rich culture and conservation with world-class service,” said Thor Urbana Co-CEO Jaime Fasja globenewswire.com. Thor Equities Chairman Joe Sitt added that the project “sets a new standard for luxury living in Latin America,” highlighting its sustainable, immersive luxury approach globenewswire.com.

reuters.com reuters.com Brazil’s Central Bank held its benchmark Selic interest rate at 15% on Sept. 17, bucking the global easing trend reuters.com. In a unanimous decision, policymakers kept rates unchanged for a second straight meeting, citing persistently high inflation (5.1% YoY, well above target) and a tight labor market reuters.com reuters.com. The move surprised some analysts who expected cuts by late 2025, but the bank signaled a “prolonged period” of restrictive policy is still needed to anchor inflation expectations reuters.com reuters.com. This means Brazil’s borrowing costs remain among the world’s highest – a factor cooling its real estate and construction sectors until relief arrives (economists now predict a first rate cut in December or January).

reuters.com reuters.com China’s housing slump persisted in the latest data. New home prices fell 0.3% in August, the same monthly drop as in July, extending a price decline trend that began in mid-2023 reuters.com. On an annual basis, new house prices are down ~2.5%, and two-thirds of cities saw year-on-year price falls reuters.com reuters.com. With demand weak and inventory high, Beijing is prepping more stimulus: “The market is anticipating stronger measures to stabilize the housing sector, including easing purchase restrictions, looser credit, and particularly a potential interest rate cut on the Loan Prime Rate on September 20,” said Zhang Dawei, analyst at Centaline reuters.com. Zhang warned that without bold steps, the real estate market faces “significant adjustment pressure in the near term” reuters.com. Authorities have already cut some mortgage rates and relaxed rules in big cities, but consumer confidence remains fragile amid developer debt woes and economic uncertainty.

worldpropertyjournal.com worldpropertyjournal.com Asia-Pacific hotel investment is cooling from record highs but remains concentrated in safe havens. H1 2025 saw $4.7 B invested in APAC hotels (down 23% YoY) as Japan, China, Australia, Singapore & S. Korea accounted for 84% of volume worldpropertyjournal.com worldpropertyjournal.com. Investors are favoring these gateway markets in a “flight to safety”, according to JLL. “Investors are gravitating to gateway cities where fundamentals remain strong, but decision-making timelines have lengthened,” said Nihat Ercan, JLL’s Asia-Pacific Hotels head worldpropertyjournal.com. Divergent price expectations have resulted in longer due diligence periods worldpropertyjournal.com. Still, Tokyo led with $1.5 B in deals, and private capital is increasingly active – PE funds and HNWIs significantly boosted hotel investments, eyeing high-quality resorts and urban hotels as tourism rebounds worldpropertyjournal.com worldpropertyjournal.com. JLL projects full-year APAC hotel transactions will tick up ~5% to $12.8 B, expecting a flurry of H2 closings as cautious institutional sellers find common ground with opportunistic buyers worldpropertyjournal.com worldpropertyjournal.com.

costar.com European real estate valuations are becoming attractive to big investors again. A new survey of German institutional investors (pension funds, insurers, banks managing €69 B AUM) found 38% view German property prices as “low or fair” now, up sharply from only 18% a year ago costar.com. For Europe overall, 50% of respondents said prices are low/fair (vs 29% prior) costar.com. Not one surveyed investor deemed European real estate “unacceptably overpriced” in 2025 costar.com. This reflects the significant price corrections and yield rises in the past 18 months – many institutions see value re-emerging and are poised to re-enter. It bodes well for transaction volumes, as pent-up capital could flow back into European markets if investors believe pricing has bottomed out.

costar.com London/UK Office Trend: Landlords and tenants are reassessing the extravagant “amenity wars” in office buildings. Since the pandemic, developers added endless perks to lure workers back (wellness centers, rooftop bars, etc.), but now both sides question the need for so many bells and whistles costar.com. With sustainability and cost efficiency in mind, the focus is shifting to core priorities: location, quality space, and energy performance, rather than gimmicks costar.com. A BCO/JLL survey found “location” is the top criterion defining a “super prime” office, while fancy tenant amenities ranked second costar.com. In other words, we may have passed “peak amenity” – going forward, offices will still feature great amenities, but the arms race is cooling as occupiers emphasize practicality (e.g., transit access, airflow, natural light) over novelty.

costar.com Paris Retail Milestone: American home furnishings brand RH (Restoration Hardware) opened a palatial flagship on Paris’s Champs-Élysées in September, marking its first foray into France costar.com. The seven-story gallery, in a historic building near Avenue Montaigne, combines retail showrooms with two restaurants (including a rooftop one with Eiffel Tower views), a champagne bar, design studio and library costar.com. This immersive concept – part store, part social space – signals confidence in Paris’s prime retail despite global retail headwinds. The property, owned by Immobilière Dassault, underwent an extensive luxury renovation to house RH’s offerings. It reflects how global luxury retail markets (like Paris) remain resilient, attracting international brands that invest heavily to create experiential flagships. Such high-profile openings also reinforce Paris’s standing as a destination for affluent shoppers and tourists, benefiting the broader retail real estate market in the city.

costar.com Phoenix Megaproject: Defying a U.S. slowdown in new retail development, Phoenix, Arizona is gaining a “multibillion-dollar” mixed-use complex called Legacy Park costar.com. Developer Vestar unveiled plans for the 200-acre site in Mesa (Phoenix metro) featuring 9.4 million sq. ft. of space when built out costar.com. Phase 1 (over $1 B cost) will include a 300,000 sq. ft. upscale outdoor mall with restaurants, about 700 apartments atop retail, and a 600-room resort hotel – likened to a new Scottsdale Quarter on steroids costar.com. Additional phases call for offices (3.4 million sq. ft. of campus space) and a large central park with a lake azbigmedia.com azbigmedia.com. Legacy Park aims to create a “new urban core” in the East Valley and is projected to generate 20,000 jobs and $56 B economic output long-term azbigmedia.com. Groundbreaking is expected in 2027, with development over 15–20 years azbigmedia.com. This illustrates that Sun Belt markets like Phoenix continue to attract massive real estate investments, leveraging population growth and demand for live-work-play environments, even as other regions see construction cooling.

Roman Bednarski