Commercial Real Estate Market

Global Commercial Real Estate Market:

The global commercial real estate market size reached US$ 7.3 Trillion in 2023. Looking forward, IMARC Group expects the market to reach US$ 9.6 Trillion by 2032, exhibiting a growth rate (CAGR) of 3.2% during 2024-2032. The market is primarily driven by the favorable economic conditions, the emerging trend of urbanization, the rising middle class, the ongoing technological advancements, and the expanding tourism and hospitality sectors.

Commercial Real Estate Market Analysis:

• Major Market Drivers: The overall strength of the economy, owing to factors, such as GDP growth, employment rates, and consumer spending, and the escalating demand for office, retail, industrial, and other public spaces, are acting as significant growth-inducing factors. Moreover, the continuous advances in technologies, the changing tenant preferences for flexible workspaces, and the elevating requirement for data centers and logistics facilities are also catalyzing the commercial real estate industry.
• Key Market Trends: The emerging trend of remote work culture, owing to the sudden outbreak of the COVID-19 pandemic, and the increasing number of flexible office space providers offering coworking and short-term lease options, are positively influencing the market growth. Additionally, as per the commercial real estate industry overview, ongoing innovations, such as smart building systems, IoT sensors, and digital tenant services, are also becoming more prevalent, driving efficiency and satisfaction.
• Competitive Landscape: Some of the major market players in the commercial real estate sector 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, etc.
• Geographical Trends: Asia Pacific accounted for the largest share of the commercial real estate market, owing to the emerging trend of urbanization, the evolving population and economic growth, and the increasing infrastructure development activities. Apart from this, the inflating consumer spending power in the region propels the need for retail spaces and the expansion of the technology and manufacturing industries, is also significantly contributing to the market growth.
• Challenges and Opportunities: Changing demographics, including the geriatric population and the shifting consumer preferences can pose numerous challenges for property owners and developers in housing, retail, and other commercial spaces, thereby hindering the commercial real estate market outlook. However, the continuous advancements in technology to enhance operational efficiency, improve tenant experiences, and unlock new revenue streams via IoT integration, smart building systems, and digital marketing strategies present significant growth opportunities for the key market players.
   

Commercial Real Estate Market Trends:

The Expanding Economic Growth

The strong economic growth across various countries is propelling the need for industrial, residential, office, and public spaces, which are among the major trends in the commercial real estate sector. Besides this, numerous factors, such as GDP growth, employment rates, and consumer spending are also positively influencing the market growth. For instance, in 2021, foreign investments in the European commercial real estate market accounted for half of the capital investments in that region, which is almost EUR 130 million (USD 137 million). Furthermore, the development of new business hubs, office spaces, retail outlets, industrial facilities, etc., is also catalyzing the market growth.

Increasing Urbanization

The emerging urbanization trends, such as the preference for living and working in urban areas are acting as significant growth-inducing factors. Moreover, the growing popularity of mixed-use developments, including residential, commercial, and recreational spaces are also positively influencing the commercial real estate market share. In addition to this, according to the National Association of Realtors report in April 2023, multifamily commercial real estate witnessed a rise in rent by 2.5% YOY during the first quarter of 2023.

Significant Technological Advancements

As per the commercial real estate market statistics, the continuous advancements in technology, such as the integration of AI and VR techniques are propelling the market growth. Moreover, big data and analytics are the other emerging technologies that use historical and real-time information to provide information on trends, patterns, associations, pricing, and demographic data, which is also catalyzing the global market. For instance, according to Alibaba, more than 5,000 real estate agents from almost 100 locations in China have adopted the live-streaming rooms method, allowing homebuyers to explore homes, and make deals all at home.

Commercial Real Estate Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country level for 2024-2032. Our report has categorized the market based on type and end use.

Breakup by Type:

• Rental
• Sales
   

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 changing business landscape and the expanding number of industries are propelling the market growth. The leading companies require office spaces, retail outlets, and industrial facilities to carry out their work and operations effectively. Moreover, the rising entrepreneurship and the growing popularity of startups globally are also positively influencing the commercial real estate industry. Additionally, in 2021, office occupancy experienced robust growth of more than 80% in almost 390 metro cities worldwide. Moreover, 30 million sq ft (MSF) of office space was absorbed since the third quarter of 2021.

Breakup by End Use:

• Offices
• Retail
• Leisure
• Others
   

The report has provided a detailed breakup and analysis of the market based on the end use. This includes offices, retail, leisure, and others. According to the report, offices accounted for the largest market share. Office buildings are leased to businesses for conducting operations, administrative work, and professional services. Rental rates for office space are typically based on factors such as location, building quality, amenities, and market demand. Moreover, the shifting preferences of consumers and businesses and the escalating demand for well-designed, aesthetic, and functional offices to accommodate the workforce, foster collaborations, and facilitate business operations are also bolstering the commercial real estate market share. For example, the Asia-Pacific (APAC) region is leading in the office market due to population growth, GDP growth, middle-class consumers, and the working-age population leveraging office demand. Also, the APAC region contributes more than 50% of office construction in the global market.

Breakup by Region:

• North America
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

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 accounted for the largest market share due to the increasing infrastructure development activities. Apart from this, the inflating consumer spending capacities and the rising infrastructure development are propelling the market growth. For instance, according to JLL’s May 2023 report, the Asia Pacific region witnessed a decline in commercial real estate investment by 30% YOY in the first quarter of 2023 reaching the total investment of US$ 27 Billion in the region.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. Some of the major market players in the Commercial Real Estate industry 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, among many others.
  
  (Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Commercial Real Estate Market Latest News:

• September 2022: Aden Group announced to launch of a smart, low-carbon industrial park project for Li Auto, where the industrial park will develop and manufacture the new generation of Li Auto's range extenders; it will also drive a group of related enterprises to settle in the park and promote the integrated and coordinated development of the local automobile industry, further improving the industry chain and accelerating the high-quality development of Mianyang High-Tech Industry Development Zone.
• November 2022: Colliers CAAC, a regional holding company, currently holding exclusive sublicenses for Central America, the Caribbean, and certain Andean countries from Colliers International announced the acquisition of a Costa Rican real estate consultancy.
• 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 US$3.1 Billion.

Commercial Real Estate Market Report Scope:

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 market?
• Who are the key players/companies in the global commercial real estate market?

Key Benefits for Stakeholders:

• IMARC’s industry 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 2024-2032.
• The research report 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 assists 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.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.