The global commercial real estate market is projected to exhibit a growth rate (CAGR) of 3.56% during 2023-2028. Favorable economic conditions, rapid urbanization, the expanding middle class, ongoing technological advancement, and the flourishing tourism and hospitality sector are some of the major factors propelling the market.
|Market Growth Rate (2023-2028)
Commercial real estate involves properties that are used for business purposes, such as office spaces, retail stores, hotels, industrial facilities, and warehouses. Compared to residential real estate, which is primarily used for living purposes, commercial properties are intended to generate income through rentals, leases, or sales. These properties serve as the foundation for a wide range of business activities, such as corporate headquarters, shopping centers, manufacturing plants, and logistics hubs. The commercial real estate sector plays a significant role in shaping the urban landscape and supporting industries across various sectors.
The expanding global economy and the increasing globalization of businesses are primarily driving the market growth. With businesses striving to establish a presence in new markets, there is a surging requirement for office spaces and retail outlets, which has led to the development of commercial real estate projects in major cities and emerging business hubs across the globe. Moreover, significant technological advancements and the bolstering growth of the e-commerce sector have facilitated the demand for specialized commercial spaces, such as warehouses and distribution centers, which are positively impacting the market growth. Additionally, the availability of low-interest-rate has made real estate investments attractive, driving domestic and international investors towards commercial properties and fueling the construction of new commercial developments and the revitalization of existing ones, thus aiding in market expansion. Furthermore, the increasing trend towards urbanization, the exponential growth of population, and the rising middle class population in emerging economies are impelling the market growth.
Commercial Real Estate Market Trends/Drivers:
The expanding economic growth
As economies expand, businesses thrive, leading to increased demand for commercial properties. Besides this, growing economies attract domestic and international investors seeking opportunities to establish or expand their operations, further surging the need for office spaces, retail outlets, industrial facilities, and logistics centers. In addition to this, economic growth influences consumer spending, which, in turn, propels the demand for commercial properties in the retail and entertainment sectors, thus presenting remunerative growth opportunities for the market. Furthermore, economic growth prompts the development of new business hubs and emerging markets, creating a need for commercial spaces to accommodate growing business activities.
With the increasing population migrating to urban areas, there is a surging demand for commercial properties, contributing to the market growth. In line with this, urbanization is also impelling the need for office spaces to accommodate a growing workforce, retail stores to cater to the urban population's needs, and entertainment venues to serve the expanding consumer base, which is supporting the market growth. Moreover, urban areas often witness infrastructure development projects, such as transportation networks and logistics hubs, which drives the demand for commercial properties. Concurrent with this, the concentration of people in urban centers also creates opportunities for mixed-use developments that combine residential, commercial, and recreational spaces, strengthening the market growth.
Significant technological advancements
The rapid evolution of technology has transformed how businesses operate and led to changing demands for commercial spaces, driving the market. The flourishing growth of the e-commerce sector has resulted in a surge in demand for warehouse and distribution centers to support online retail operations, aiding in market expansion. Furthermore, the growth of technology-driven industries, such as startups and tech companies, has created a need for innovation hubs and flexible office spaces that can adapt to their unique requirements. In addition to this, significant advancements in building technologies have led to the rise of smart buildings, which integrate digital systems for energy management, security, and tenant convenience, creating a favorable outlook for the market. Besides this, these technological advancements enhance the efficiency and functionality of commercial properties and contribute to their attractiveness for tenants and investors, propelling the market forward.
Commercial Real Estate Industry Segmentation:
IMARC Group provides an analysis of the key trends in each segment of the global commercial real estate market report, along with forecasts at the global, regional, and country levels for 2023-2028. Our report has categorized the market based on type and end use.
Breakup by Type:
Rental is dominating the market
The report has provided a detailed breakup and analysis of the market based on the type. This includes rental and sales. According to the report, rental represented the largest segment.
The evolving business landscape and the expansion of industries worldwide have created a constant need for commercial spaces. Companies, both established and emerging, require office spaces, retail outlets, and industrial facilities to carry out their operations effectively. This demand is further fueled by the rise of entrepreneurship and the increasing number of startups that seek flexible and affordable commercial spaces to establish and grow their businesses.
Moreover, urbanization and population growth have contributed significantly to the demand for commercial real estate. As more people migrate to urban areas in search of better opportunities, the need for commercial spaces, such as retail stores, restaurants, and entertainment venues increases, contributing to the market’s growth.
Furthermore, the bolstering growth of the services sector, including finance, technology, healthcare, and professional services, that require modern and well-equipped office spaces to facilitate their operations and attract talent is strengthening the market growth.
Breakup by End Use:
Offices hold a larger share in the market
A detailed breakup and analysis of the market based on the end use has also been provided in the report. This includes offices, retail, leisure, and others. According to the report, offices accounted for the largest market share.
The changing needs and preferences of businesses and consumers are one of the key factors impelling the demand for commercial real estate for office, retail, and leisure purposes. The growth of the global economy and the expansion of businesses have created a continuous demand for office spaces, influencing the market growth. Besides this, the rising demand for well-designed, aesthetic, and functional offices to accommodate the workforce, foster collaborations, and facilitate business operations are presenting remunerative growth opportunities for the market.
In addition to this, the expanding establishment of brick-and-mortar retail stores, shopping complexes, and malls, driven by consumer preferences for in-person shopping experiences, is contributing to the market growth. Concurrent with this, the flourishing growth of the hotels, restaurants, and cafes (HORECA) sector, combined with the proliferation of various entertainment centers, theatres, and recreational venues as people seek experiences and leisure activities, is fueling the market growth.
Breakup by Region:
- North America
- United Kingdom
- Asia Pacific
- South Korea
- Latin America
- Middle East and Africa
Asia Pacific exhibits a clear dominance in the market, accounting for the largest commercial real estate market share
The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounts for the largest share.
Rapid urbanization, population growth, and the evolving economic growth in the Asia Pacific region are major drivers of the market growth. The region's booming middle class and increasing consumer spending contribute to the demand for retail spaces, while the expansion of industries, such as technology and manufacturing, are creating a favorable outlook for the market growth. Besides this, the expanding infrastructure development and growing foreign direct investment in the region are acting as other growth-inducing factors.
The market in North America is being propelled by several factors, such as economic growth and urbanization, a robust services industry, and the expanding corporate sector. In line with this, the rise of e-commerce platforms and technological advancements are contributing to the demand for warehouse and distribution spaces in the region.
Europe's diverse and vibrant economies attract businesses from various sectors, necessitating office spaces and retail outlets in the region. In addition, the significant expansion of the European tourism industry drives the demand for commercial properties in the hospitality and leisure sectors, such as hotels, resorts, and entertainment venues, presenting lucrative growth opportunities for the market.
The market features a highly competitive landscape characterized by the presence of numerous players, including real estate developers, property management firms, investors, and brokerage companies. These market participants strive to gain a competitive edge and capture a larger market share by offering unique value propositions and tailored services. The market is influenced by location, property quality, pricing, and the ability to effectively meet client needs. In addition to this, ongoing technological advancements are also influencing the landscape of the market as companies leverage digital platforms and innovative technologies, such as virtual reality tours, data analytics, and property management software, to gain a competitive advantage through enhanced customer experiences and streamlined operations.
The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:
- Boston Commercial Properties Inc.
- Brookfield Asset Management
- Dalian Wanda Group
- DLF Ltd.
- Link Asset Management Limited
- MaxWell Realty Canada
- Prologis Inc.
- RAK Properties PJSC
- Shannon Waltchack LLC
- In June 2023, Prologis, Inc. announced its acquisition of nearly 14 million square feet of industrial properties from opportunistic real estate funds affiliated with Blackstone for $3.1 billion.
- In June 2023, Brookfield Asset Management acquired a controlling stake in Indian solar-panel maker CleanMax Enviro Energy Solutions for $360 million.
- In March 2023, Link Asset Management Limited, the manager of Link Real Estate Investment Trust, announced the completion of its acquisition of two suburban retail assets in Singapore.
Commercial Real Estate Market Report Scope:
|Base Year of the Analysis
|Scope of the Report
||Exploration of Historical and Forecast Trends, Industry Catalysts and Challenges, Segment-Wise Historical and Predictive Market Assessment:
| End Uses Covered
||Offices, Retail, Leisure, Others
||Asia Pacific, Europe, North America, Latin America, Middle East and Africa
||United States, Canada, Germany, France, United Kingdom, Italy, Spain, China, Japan, India, South Korea, Australia, Indonesia, Brazil, Mexico
||Boston Commercial Properties Inc., Brookfield Asset Management, Dalian Wanda Group, DLF Ltd., Link Asset Management Limited, MaxWell Realty Canada, Prologis Inc., RAK Properties PJSC, Shannon Waltchack LLC, etc.
||10% Free Customization
|Report Price and Purchase Option
||Single User License: US$ 2499
Five User License: US$ 3499
Corporate License: US$ 4499
|Post-Sale Analyst Support
||PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)
Key Questions Answered in This Report:
- How has the global commercial real estate market performed so far, and how will it perform in the coming years?
- What are the drivers, restraints, and opportunities in the global commercial real estate market?
- What is the impact of each driver, restraint, and opportunity on the global commercial real estate market?
- What are the key regional markets?
- Which countries represent the most attractive commercial real estate market?
- What is the breakup of the market based on the type?
- Which is the most attractive type in the commercial real estate market?
- What is the breakup of the market based on the end use?
- Which is the most attractive end use in the commercial real estate market?
- What is the competitive structure of the global commercial real estate market?
- Who are the key players/companies in the global commercial real estate market?
Key Benefits for Stakeholders:
- IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the commercial real estate market from 2017-2028.
- The research study provides the latest information on the market drivers, challenges, and opportunities in the global commercial real estate market.
- The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
- Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the commercial real estate industry and its attractiveness.
- Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.