Q1 2026 pending deals look positive
Based on data from MSCI, the value of pending deals (i.e. those in contract but not yet completed) at the beginning of this year - which is generally strongly correlated with the final turnover data - is 29% higher than Q1 last year. When considered in the wider context of 2025’s pattern of performance - it helps reinforce our position that the positive forecasts we made for 2026 back in early December remain in place: the upwards swing will continue, and we anticipate that there will be a 15% rise in global investment in this year.
Positive factors coalescing
A number of factors continue to coalesce to support our view. Firstly, there has been a broad-based rebound in investors’ sentiment, with this no longer so contingent on further falls in interest rates; CRE pricing has remained stable over the last 12-18 months as capital values bottomed out and positive total returns have emerged; and there is growing appetite for investment in the equity component of real estate, as falling returns in the lending markets means less competition from that quarter.
Positive denominator effect coming into play
There remain some parts of the market that continue to be less active than they were previously, however we should see more movement in these areas given there is also now a positive denominator effect supporting CRE fundraising, and a good relative value proposition against other asset classes. Additionally, in most markets and sectors, the debt capital markets are now supporting the return of accretive financing. This should all help create more churn and contribute towards a virtuous circle: as turnover accelerates, confidence grows, and that confidence then breeds a feeling that people can be more positive in their underwriting, in turn supporting CRE pricing.
While the backdrop of macro geopolitical uncertainty hasn’t faded, and will no doubt cause some periods of hesitation going forward, this will be a common feature across all asset classes. Overall, real estate is in a strong relative position to see a more attractive total returns outlook.
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