Global investors are set to deploy almost $150 billion in commercial real estate (CRE) according to research from global property adviser Knight Frank.
Knight Frank’s Active Capital survey found that 87% of survey respondents intend to increase their direct CRE investment in 2026.
Almost two-thirds (62%) expect to be net buyers of CRE, signalling a clear appetite for acquisitions, with just 12% expecting to be net sellers.
Falling interest rates, greater confidence in occupier demand and demographic trends are cited as the main drivers of the increased appetite among investors, outweighing geopolitical risks.
Interest rates were cited by 54% of respondents, followed by occupier demand (40%), bond yields (31%), demographic changes (31%), and AI (30%).
A fifth (20%) of investors referenced geopolitical risk as a concern while domestic policies were cited by just 15%.
The UK and Germany emerged as the top destinations for property investors, being a target for 60% and 52% of respondents respectively.
Offices reemerged as the top asset class within CRE with investors more confident that future workplace trends will involve office space. Investors are though differentiating between assets with strong ESG credentials and those facing long-term obsolescence.
According to Nick Braybrook, partner and global head of capital markets at CRE, the survey is “empirical evidence of a turnaround in the global real estate investment market”.
“After several torrid years for the global office market, the undeniable return of the occupiers has finally spurred a return of the investors, and the sector has gone from almost last place to now first.
“The return of core investors is the missing piece of the jigsaw, being the pricing that the rest of the market builds from,” said Braybrook.
“Capital remains selective, concentrating in locations where confidence in values, liquidity and exit prospects are highest, but in those markets the growing imbalance between buyers and net sellers points to clear competitive tension. The wide spread of target returns reported in the survey also bodes well for overall global turnover levels going forward.”