Construction Preview: Unveiling Future Real Estate Developments
In the dynamic world of real estate and infrastructure, 2025 is set to see a significant focus on technology-driven and sustainable assets. Two key sectors that are expected to lead this change are data centres and green buildings, according to industry experts.
Data centres, the intersection of real estate, infrastructure, and power, are experiencing a surge in investment. The explosion of data consumption driven by technological advancements like artificial intelligence is attracting institutional capital towards scalable and resilient data centre platforms. In the U.S., data centre acquisitions surged by over 60% in 2024, signalling accelerating momentum continuing into 2025.
Investors are increasingly viewing data centres as part of alternative real estate sectors that show consistent performance and lower volatility compared to traditional sectors like office and retail. These assets provide durable, recurring income streams aligned with the tech-enabled, services-driven economy.
Green buildings, on the other hand, are gaining prominence due to their energy efficiency and alignment with global sustainability goals. Environmental, social, and governance (ESG) considerations are reshaping investment strategies within real estate, with green infrastructure becoming a key theme in the "rebirth" of retail and other property types. This reflects a broader shift towards sustainable development.
Investors are focusing on properties that meet evolving ESG standards, which reduces long-term risks and appeals to tenants and buyers prioritizing environmental responsibility. This trend contributes to reshaping the real estate landscape to be more resilient and future-proof.
Other broader real estate trends supporting these sectors include the influence of younger generations, increased capital optimism, and a growing focus on workforce housing and multifamily developments, some of which incorporate green building principles.
In conclusion, investment trends in 2025 emphasize technology-driven and sustainable real estate, with data centres and green buildings leading as priority sectors due to their resilience, growth potential, and alignment with broader economic and environmental shifts. The listed real estate market is expected to lead private markets in responding to interest rate changes or economic downturns.
The built environment contributes around 42% of global CO2 emissions, with around 27% stemming from building operations. As such, sustainability concerns are becoming increasingly important, with nearly 75% of future infrastructure and around 40% of the future total global real estate inventory yet to be built.
Approximately 60% of asset owners plan to increase their allocations to infrastructure, while 30% anticipate increasing their exposure to real estate. A resurgence in demand for office spaces has been observed, with higher rents and better occupancy rates. Listed real estate companies are under intense pressure to ensure their properties meet sustainability standards to remain competitive.
Investors seeking sustainable investing goals can optimize their real estate ETFs for 'green certificates' and carbon intensity. ETFs have seen more than 60% growth in 2024 through investor allocations, with investors attracted by scalability and liquidity.
Despite the rise of e-commerce and impacts of Covid-19, the office and retail sectors should not be written off yet. A surge in the 'Crane Index' is predicted due to the need for investment in real estate and infrastructure sectors, with governmental policy supportive of infrastructure investment. The listed real estate market is expected to lead private markets in responding to interest rate changes or economic downturns.
Sources: [1] [2] [3] Real Capital Analytics [4] BlackRock [5] United Nations
- The explosion of data consumption in technology advancements like artificial intelligence is drawing institutional capital towards private markets in scalable and resilient data centre platforms.
- In the dynamic industry of finance and investing, green buildings are gaining prominence as sustainable assets due to their energy efficiency and alignment with global sustainability goals.
- Green infrastructure, such as green buildings, is becoming a key theme in the "rebirth" of retail and other property types as environmental, social, and governance (ESG) considerations reshape investment strategies within real estate.
- As investors focus on properties that meet evolving ESG standards, they can optimize their real estate investments by selecting exchange-traded funds (ETFs) that prioritize 'green certificates' and lower carbon intensity, with investors attracted by the scalability and liquidity of ETFs.
