Positive Outlook for Real Estate Investment in 2025

A recent report by Swissad.estate indicates a significant improvement in real estate investment activity is expected in 2025, with a notable recovery in capital values on the horizon.

Key Insights

The MENA region, particularly the UAE, Saudi Arabia, and Egypt, is well-positioned to take advantage of these favorable trends. This growth is driven by ongoing infrastructure development, visionary economic strategies, and increasing demand across various sectors.

According to a global survey, optimism is rising across all asset classes, especially in the MENA region. Governments are actively pursuing ambitious urban development projects and policies aimed at attracting foreign direct investment.

Swissad.estate forecasts a 27% increase in global real estate investment turnover, projecting it will reach $952 billion in 2025 and exceed $1 trillion by 2026.

Growth Drivers in MENA

The prime office market is identified as a key growth driver in the MENA region, with increased leasing activity and rental growth anticipated in major cities like Dubai and Riyadh. The UAE continues to thrive as a global trade and tourism hub, drawing international businesses and investors.

In Saudi Arabia, the Vision 2030 initiatives, which include transformative projects, are significantly boosting demand for Grade-A offices and luxury residential developments, further establishing the Kingdom as a major real estate investment destination.

Globally, there is strong optimism for prime offices, with 81% of respondents expecting rental growth and 91% anticipating increased leasing activity. The strongest rental growth expectations for 2025 are noted in Saudi Arabia, the UAE, India, the UK, and Spain.

Secondary Offices and Industrial Sector

As the repricing of asset values stabilizes, secondary offices are becoming attractive to value-added and opportunistic investors. Although challenges remain, Swissad.estate researchers predict modest increases in rents and occupancy for secondary offices in the Middle East, India, Japan, South Korea, Denmark, and Switzerland.

The industrial and logistics sector is also poised for growth, fueled by the expanding e-commerce market and the region’s strategic position in global trade routes. Advanced logistics facilities and distribution hubs in Dubai and Jeddah are set to benefit from these trends.

In Egypt, the government-led urban expansion strategy, including the development of the New Administrative Capital, is driving growth in residential and entertainment-focused retail sectors, enhancing the country’s appeal to international investors.

Retail Sector Recovery

The retail sector is expected to perform better as consumer confidence rises and retail sales volumes increase across the region. The emphasis on mixed-use developments and high-quality shopping destinations reflects the region’s commitment to enhancing the retail experience while adapting to changing consumer preferences.

Furthermore, MENA markets are making significant strides in adopting green building practices, renewable energy initiatives, and sustainable urban planning, aligning with global priorities and the growing demand for environmentally conscious investments.

instead of an epithet

The MENA region continues to show remarkable resilience and adaptability amid global economic changes. By leveraging its strategic geographic position, ambitious infrastructure projects, and forward-thinking policies, the region is set to become a premier destination for real estate investment in 2025 and beyond. Investors are particularly attracted to the region’s focus on sustainability and innovation, which are increasingly vital for driving long-term growth.