Commercial Real Estate Market
Commercial Real Estate Market Study by Property Management, Property Sales, Commercial Leasing, Residential Leasing, Advisory, and Valuation & Capital Markets From 2024 to 2034
Analysis of Commercial Real Estate Market Covering 30+ Countries Including Analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
Commercial Real Estate Market Outlook (2024 to 2034)
The global commercial real estate market is analyzed to reach a valuation of US$ 4,560.34 billion in 2024, according to a new research report published by Fact.MR. The market has been projected to rise at a noteworthy CAGR of 7.6% to achieve a size of US$ 9,476.79 billion by the end of 2034.
The commercial real estate market growth is driven by the growing number of prominent companies focusing on the integration of the latest technologies in operational activities. Smart building systems, remote property management, and data-driven analytics are just a few examples of how technology is incorporated into real estate to increase the efficiency and appeal of CRE properties to potential tenants. Companies and investors who desire technology are getting attracted to properties with improved technological capabilities, such as IoT-enabled maintenance and energy-efficient HVAC systems.
Other than this, one of the commercial real estate market trends is the growing demand for eco-friendly and energy-efficient constructions, which is mostly driven by increasing strict sustainability regulations in several countries. These days, several investors and renters are giving preference to LEED-certified or green properties that minimize utility expenses, lessen carbon footprints, and support business sustainability objectives.
Key Market Growth Drivers
- Demand for commercial real estate is continuously increasing across the globe, particularly in countries where a high number of people are moving to urban areas and expanding businesses.
- Due to the high percentage of people, shifting to cities and as well number of startups driving up the need for office space, retail stores, multifamily housing, and others is also growing.
- The e-Commerce industry is expanding quickly in several countries, which is also contributing to the commercial real estate market size expansion. These factors are contributing to increased requirement for industrial space, especially warehouses and distribution facilities for last-mile transportation, order fulfillment, and storage.
- Several prominent companies involved in e-Commerce business or logistic services are heavily investing in real estate, particularly those located close to cities and transit hubs.
- As the hybrid work model is becoming more common, several companies are reconsidering the use of traditional office spaces. Because there is a growing need for coworking spaces, shorter lease terms, and contemporary office facilities businesses are widely looking for collaborative, flexible locations that adjust to changing occupancy needs.
| Report Attributes | Details |
|---|---|
| Commercial Real Estate Market Size (2024E) | US$ 4,560.34 Billion |
| Forecasted Market Value (2034F) | US$ 9,476.79 Billion |
| Global Market Growth Rate (2024 to 2034) | 7.6% CAGR |
| North America Market Value (2024E) | US$ 1,543.77 Billion |
| East Asia Market Growth Rate (2024 to 2034) | 8.3% CAGR |
| Property Management Segment Value (2034F) | US$ 3,319.51 Billion |
| Office Buildings Segment Value (2034F) | US$ 3,528.01 Billion |
| Key Companies Profiled | Prologis, Inc.; Simon Property Group LP; Shannon Waltchack LLC; DLF Ltd; Boston Properties Inc.; Segro; Link Asset Management Limited; Wanda Group; Onni Contracting Ltd; MaxWell Realty; ATC IP LLC; Nakheel PJSC; RAK Properties |
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Why is the Market for Commercial Real Estate Showing Bullish Sentiments?
“Growing Adoption of Hybrid Work Model Instead of Remote”
Several companies implementing a workforce that no longer requires a full-time on-site presence, which is also becoming a global trend known as flexible and hybrid work culture and is somehow driving up demand for office space. Several companies are finding hybrid work models better in comparison with on-site and remote working.
Flexible leases that readily scale up or down based on occupancy demands are replacing traditional long-term leases for several businesses. Coworking spaces and flexible office designs that facilitate hot-desking and collaboration are growing in demand because of this change.
In line with the new, more flexible work culture, shared, tech-enabled areas that increase productivity as well as employee well-being are given priority in modern office buildings.
What is Limiting the Market Growth of Commercial Real Estate?
“Rising Construction Raw Material Costs and High Maintenance Prices”
The market players in commercial real estate are facing several issues due to increasing construction material costs and high maintenance expenditures, which directly impact project viability and profitability. Development projects are becoming more costly due to rising labor costs and resources, such as steel, concrete, and lumber, particularly in areas where building costs are already high.
If revenues are not guaranteed, these high expenses cause developers to postpone or even abandon projects. Continuing upkeep of current properties, especially older structures that need regular repairs or improvements also adds to the financial burden, lowering the total profitability of CRE investments and restricting market growth.
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Country-wise Insights
North America is projected to account for a significant market share throughout the assessment period due to the increasing necessity for digital infrastructure and the expanding e-Commerce industry, which is driving up the requirements for industrial spaces and data centers. As companies embrace hybrid work patterns, there is a growing need for flexible office spaces and mixed-use complexes in cities, such as New York, San Francisco, and Toronto.
What is the Market Outlook for Commercial Real Estate in the United States?
“Growing e-Commerce and Logistic Industries Driving Market Expansion”
| Attribute | United States |
|---|---|
| Market Value (2024E) | US$ 1,380.44 Billion |
| Growth Rate (2024 to 2034) | 7.9% CAGR |
| Projected Value (2034F) | US$ 2,963.88 Billion |
Demand for commercial real estate, warehouses, distribution centers, and logistics hubs that support order fulfillment and last-mile delivery is increasing in the United States due to the expanding e-Commerce industry. To satisfy customers' demands for speedy delivery, retailers and logistics firms need additional storage and effective distribution networks as online shopping is growing in popularity.
The Midwest and East Coast's important logistical corridors, where supply chain efficiency is increasing by proximity to major population centers and transportation infrastructure, have seen significant investments due to this transition. Because of this, industrial premises that are suited to e-Commerce requirements are seeing strong development in the market in the United States for commercial real estate.
Why is the Market for Commercial Real Estate Expanding in South Korea?
“Government Incentives for Green Building Initiatives and Technology Integration”
| Attribute | South Korea |
|---|---|
| Market Value (2024E) | US$ 272.71 Billion |
| Growth Rate (2024 to 2034) | 8.6% CAGR |
| Projected Value (2034F) | US$ 619.45 Billion |
The market for commercial real estate is evolving in South Korea because of the growing integration of smart building technologies. More tenants are increasingly looking for energy-efficient as well as technologically integrated spaces that improve the use and attraction of real estate. Sustainable development is further driven by government incentives for energy efficiency and green building, which is increasing the value of homes that satisfy these requirements. Other than this, considerable foreign investment is increasing in commercial real estate in South Korea because of its open rules and stable economy.
Category-wise Insights
In the major market segments, demand for multifamily residential buildings is evaluated to increase at 7.2% CAGR over the next ten years. As more people are moving into cities, there is a greater demand for convenient and reasonably priced housing options. More developers and stakeholders are finding multifamily projects appealing because they generally make better use of available land and resources.
Which Product and Service is Gaining Popularity in the Market?
“Helping to Enhance Property Value and Operational Efficiency”
| Attribute | Property Management |
|---|---|
| Segment Value (2024E) | US$ 1,414.96 Billion |
| Growth Rate (2024 to 2034) | 8.9% CAGR |
| Projected Value (2034F) | US$ 3,319.51 Billion |
The need for property management is increasing due to its contribution to increasing property value, operational effectiveness, and tenant happiness. By attending to fundamental requirements, such as security, repairs, tenant services, facility renovations, and others efficient property management guarantees the upkeep and seamless operation of facilities. Property management is using more advanced technology, such as IoT for predictive maintenance and energy management systems, which is helping to lower costs and enhance the tenant experience, as smart buildings and sustainable practices are gaining popularity.
Property management is becoming essential to optimizing returns on CRE investments because it maintains facilities safe, functional, and appealing, thereby increasing occupancy rates and rental yields.
Why is Demand for Office Building Increasing at a Notable Growth Rate?
“Companies Widely Adopting Hybrid Work Model”
| Attribute | Office Buildings |
|---|---|
| Segment Value (2024E) | US$ 1,507.51 Billion |
| Growth Rate (2024 to 2034) | 8.9% CAGR |
| Projected Value (2034F) | US$ 3,528.01 Billion |
Demand for office buildings is increasing as companies are increasingly adopting hybrid work cultures and placing a higher value on contemporary, adaptable workspaces that support productivity and teamwork. Businesses are increasingly looking for office spaces with advanced amenities, digital connections, and environment-friendly features to entice workers to return to face-to-face work and support environmental objectives.
Other than this, industries including professional services, finance, technology, and others are still growing, which is driving up the need for new office space in cities and other business hubs. The emphasis on convenience and employee well-being is also driving up demand for office buildings with eco-friendly layouts, wellness certifications, and features that promote work-life balance.
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Competitive Landscape
Key players in the commercial real estate market as well as investors are heavily investing in green buildings, taking advantage of government subsidies, and satisfying energy-efficiency regulations. Long-term profitability is increasing by sustainable properties, such as LEED-certified buildings, which is attracting more tenants prepared to pay more for areas with low carbon footprints and energy efficiency. Other than this, smart building technologies, such as Internet of Things (IoT) systems for automation, predictive maintenance, energy management, and others are widely used by real estate developers and property managers, which is also pushing the market in the upward direction.
- In November 2024, for US$ 80.5 million, an affiliate of Alexandria Real Estate Equities Inc. sold a 248,000-square-foot building at 14225 Newbrook Drive in Chantilly, Virginia, to a New Mountain Capital affiliate in New York.
- In August 2024, on behalf of the government, state-owned NBCC (India) Ltd. said that it had finished selling commercial assets in the country's capital for almost Rs 14,800 crore. The business claimed in a regulatory filing that it has sold out of its inventory of office space at the World Trade Center (WTC) project in Nauroji Nagar. In addition, all of the retail and commercial space in Downtown Sarojini Nagar has been sold.
Fact.MR provides detailed information about the price points of prominent players in the commercial real estate market positioned across the world, sales growth, production capacity, and speculative technological expansion, in this new market report.
Segmentation of Commercial Real Estate Market Research
-
By Product & Service :
- Property Management
- Property Sales
- Commercial Leasing
- Residential Leasing
- Advisory, Valuation & Capital Markets
-
By Major Market :
- Office Buildings
- Multifamily Residential Buildings
- Retail Buildings
- Industrial Buildings
- Hospitality Buildings
-
By Region :
- North America
- Western Europe
- Eastern Europe
- Latin America
- East Asia
- South Asia & Pacific
- Middle East & Africa
Table of Content
1. Executive Summary 2. Industry Introduction, including Taxonomy and Market Definition 3. Market Trends and Success Factors, including Macro-economic Factors, Market Dynamics, and Recent Industry Developments 4. Global Market Demand Analysis and Forecast, including Historical Analysis and Future Projections 5. Pricing Analysis 6. Global Market Analysis and Forecast 6.1. Product And Service 6.2. Major Market 7. Global Market Analysis and Forecast, By Product And Service 7.1. Property Management 7.2. Property Sales 7.3. Commercial Leasing 7.4. Residential Leasing 7.5. Advisory, Valuation & Capital Markets 8. Global Market Analysis and Forecast, By Major Market 8.1. Office Buildings 8.2. Multifamily Residential Buildings 8.3. Retail Buildings 8.4. Industrial Buildings 8.5. Hospitality Buildings 9. Global Market Analysis and Forecast, By Region 9.1. North America 9.2. Latin America 9.3. Western Europe 9.4. Eastern Europe 9.5. Asia Pacific 9.6. East Asia 9.7. MEA 10. North America Sales Analysis and Forecast, by Key Segments and Countries 11. Latin America Sales Analysis and Forecast, by Key Segments and Countries 12. Western Europe Sales Analysis and Forecast, by Key Segments and Countries 13. Eastern Europe Sales Analysis and Forecast, by Key Segments and Countries 14. Asia Pacific Sales Analysis and Forecast, by Key Segments and Countries 15. East Asia Sales Analysis and Forecast, by Key Segments and Countries 16. MEA Sales Analysis and Forecast, by Key Segments and Countries 17. Sales Forecast by Products And Services and Major Markets for 30 Countries 18. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard 19. Company Profile 19.1. Prologis, Inc. 19.2. Simon Property Group LP 19.3. Shannon Waltchack LLC 19.4. DLF Ltd 19.5. Boston Properties Inc. 19.6. Segro 19.7. Link Asset Management Limited 19.8. Wanda Group 19.9. Onni Contracting Ltd. 19.10. MaxWell Realty 19.11. ATC IP LLC 19.12. Nakheel PJSC 19.13. RAK Properties
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- FAQs -
What is the outlook for commercial real estate market in 2024?
The global market for commercial real estate is estimated at US$ 4,560.34 billion in 2024.
At what rate is the global market projected to advance?
Demand for commercial real estate is projected to exhibit a CAGR of 7.6% from 2024 to 2034.
What is the forecasted market value for commercial real estate by 2034?
The market is forecasted to reach a value of US$ 9,476.79 billion by the end of 2034.
What are the projections for the market in East Asia by 2034?
The East Asian market is estimated at US$ 985.86 billion in 2024 and is projected to advance at 8.3% CAGR through 2034.
Which are the prominent leaders offering commercial real estate?
Prologis, Inc., Simon Property Group LP, DLF Ltd., Boston Properties Inc., and Segro are leading players in the market.
At what pace is the market projected to grow in Japan?
The market in Japan is projected to expand at a CAGR of 8.4% through 2034.
Which major market segment holds a high portion of the market share?
The office buildings segment is evaluated to reach a size of US$ 1,507.51 billion in 2024.
Commercial Real Estate Market