As we head into 2025, we naturally reflect on 2024; a year characterised for real estate, at least in part, by its distinct lack of character. There was no dramatic reduction in interest rates (they are creeping down slowly but are unlikely to stay there long term), no surge in insolvencies (although there were some) and no sudden opening up of the investment market (wishful thinking!). Rather than the “ready, steady, go!” sprint start predicted by many for the year just gone, we have witnessed more of a “slow and steady wins the race” approach, one of gradual progress and cautious optimism for the road ahead.

One of the predictions that is playing out is the continued shift away from interest in traditional asset classes (retail, offices etc.) towards what were previously referred to as “alternative” asset classes – these are now not so much alternative as increasingly established at front and centre stage in their own right. The real estate market is now fully alive to the importance of infrastructure for its ability to thrive, with digital and energy infrastructure currently topping the charts.

Another aspect of the real estate market recently brought into focus as an inevitable consequence of elections taking place home and away is the ability of regulation (or indeed lack thereof) to manipulate and influence the direction of travel. With immediate post election market impacts usually signalling nothing more than relief at a certain result, we will all have to wait to see the actual effects of changes in leadership across the globe. In this country there is an ambitious agenda for planning reform to “get Britain building” again – certainly, the provision of 1.5 million new homes requires an awful lot of building (and a properly functioning planning system)! And we are certainly not short of prominent real estate-related bills making their way through Parliament, particularly in the residential field with significant leasehold and renters’ rights reform on the horizon, as well as potential for a change in approach to security of tenure for business tenancies not far behind. In the US, it will be interesting to see whether Trump’s previous support for deregulation continues into his second term, and how the imposition of tariffs may impact broader economic trends and investor sentiment.

On the basis that “mood moves markets”, we remain optimistic for the months ahead, and ready for some new challenges. The Real Estate Outlook 2025 aims to provide a helpful insight into some of the activity we expect to see and potential opportunities that you may wish to explore – enjoy!

With very best wishes from the Linklaters Real Estate Team for a successful 2025.

Imogen Jones, Counsel, Real Estate