Going into 2026, we were poised to see an increase in commercial property transactions as the confidence that had returned to global markets in the second half of 2025 continued to build. Geopolitical events in the final week of February curtailed that somewhat: a fresh round of uncertainty was injected into global markets, and an energy-driven supply shock threatened to upend the narrative around inflation, interest rates, and growth. March 2026 felt like a month where the mood dipped and investor decisions went on pause, however, the reality is quite different to the perception. 

Investors ‘getting on with it’ in light of continued volatility

While undoubtedly more uncertainty this year is challenging for real estate, it needs to be placed in context. Since the beginning of this decade, we’ve lived through a period of ‘Great Volatility’, where the investment landscape has fundamentally changed. There has been a structural shift in the established rules governing the behaviour of economies and financial markets, disrupting investors’ preconceptions around how different parts of the system interact. This period has been marked by a series of major macro events - the Covid-19 pandemic, Russia’s invasion of Ukraine, new US tariffs on imported goods on ‘Liberation Day’ - with the conflict in Iran the latest in a long line. There is now a greater desire and propensity to remain active during these periods of volatility – a sense that investors have to ‘get on with it’ and continue to trade.

Real estate offers diversification

Real estate, after all, while a GDP-linked asset class with total returns correlated with the performance of the wider economy, has a number of inherent strengths. It is tangible, scarce, and rental income can provide steady returns during periods of uncertainty, even if capital values are more volatile. Crucially, its returns are uncorrelated with other asset classes, and particularly with equities. This diversification is key: with equities and bonds increasingly moving together, real estate’s combination of income, tangible value and portfolio diversification is once again becoming central to institutional asset allocation.

Transactions delayed, not destroyed

The current market has seen more of a recalibration in recent weeks than a monumental change: transactions have been delayed, not destroyed. The prerequisites for recovery remain in place, albeit timeframes may have lengthened. Based on the current market consensus of when the current conflict in the Middle East will end, the pending deals data indicates a potential 18% rise in impending deals this quarter in Q2 2026. Ultimately, it probably only needs a bit more of a stable status quo to get activity moving once more. 

Further information

Contact Oliver Salmon

Savills Impacts: What’s the role of real estate investment in the era of Great Volatility?