Insights H1 2025 | 9 Improved fundraising, strong fundamentals and US tariffs to drive growth in select markets Commercial real estate fundraising should improve as the year progresses, with investors becoming more comfortable that valuations have bottomed out, supported by thawing credit conditions and easing monetary policy. The pullback in starts that we have seen to likely to amplify housing shortages over the medium term. On the demand side, stretched purchase affordability and demographic shifts are forcing households to rent for longer which is likely to keep rents and occupancy rates high. Logistics and residential sectors continue to see strong fundamentals and returns across cities. In the office space, elevated incentives and vacancy rates continue to impact income returns but net absorption as a proxy for tenant demand has lifted in Sydney’s CBD market with many occupiers focused on prime buildings in core locations. Finally, rising US tariffs may have further impacts on global supply chains and trade flows, benefitting industrial / logistics properties in selective markets.
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