Research Reports

Central banks were never going to deliver the rate hikes that markets have been quick to price in since the eruption of conflict in the Middle East earlier in March. Admittedly, the Reserve Bank of Australia did kick off the week with a 25 basis point (bp) hike on 17 March, but it was already on a tightening path. Policymakers elsewhere adopted a cautious tone, left rates unchanged and stressed the need to wait and see how events unfold.

The Iran conflict has entered its third week and various outcomes remain possible. This makes it difficult to have clarity around the economic and financial market outlook: the world economy will simply look very different if oil is above US$120 per barrel versus if it is below US$90. In this environment the best course of action is to humbly acknowledge what we don’t (and can’t) know and focus on those geographies and asset classes where we have conviction. The oil supply shock has seen us widen the tail risks in our probabilities, with both “wings” rising versus February at the expense of the mildly dovish “just right” scenario. Predictably, given the inflationary impact of the oil shock, our ”too hot” scenario rose, but we remain lower than the market-implied probability here.

Europe’s transition from decades of underinvestment in defence toward greater strategic autonomy is one of the most significant fiscal turning points in recent history, with far-reaching consequences for growth, industry and real assets. The report explores the macroeconomic and policy backdrop, alongside how shifting geopolitical priorities are translating into sustained increases in defence expenditure across Europe.

The European residential market is expected to remain resilient, despite the potential impact of a prolonged conflict in the Middle East leading to higher inflation and interest rate rises in 2026. Our previous downside scenario assumes a more damaging long-term trend than justified by on events to date. As a reference it showed a modest 80 bps p.a. impact on our previous base case returns. New residential supply remains limited across most European markets, although we anticipate a gradual increase in residential completions in 2026-28. In France, for example, more housing has been built in 2025 than in any other European country, despite a 17% year-on-year decline. Over the last 15 years, residential has doubled its share of total volumes invested in European real estate. Investors continue to seek diversification, with operational residential assets offering an attractive alternative for investors, underpinned by high occupancy rates and strong rental growth prospects.

2025 was a positive year for the European hotel investment market, with transaction activity strengthening and investor engagement broadening. Capital continued to flow into the sector, liquidity improved across both equity and debt markets, and pricing expectations became more closely aligned. Supportive macro -economic conditions and a borrower -friendly, competitive debt environment provide a solid foundation for further growth in transaction volumes in 2026.

Economic data are sending mixed signals once again—growth is holding up, sentiment remains fragile, and real estate markets are adjusting to an environment that feels both familiar and fundamentally different. In this research paper, AEW explores what this means for investors in the year ahead.

After a volatile reset, APAC private real estate enters 2026 on firmer footing—but without an easy path forward. Interest rates have moderated and activity has improved in select markets, yet policy flexibility remains limited and growth uneven. AEW explores what this means for investors in the year ahead.

Hospitality real estate today presents a rare convergence: durable demand growth flowing into constrained supply; transaction pricing far below replacement cost; and a less competitive landscape where institutional capital has retreated. Each of these dynamics alone would merit attention. Together, they define a window for disciplined, operationally focused investors. It will not stay open long.

CRE is a tangible asset class that balances income, growth, and risk mitigation and should be a core pillar of both institutional and private portfolios.

This North American House View publication is produced each year and serves two essential purposes. First, it highlights our outlook for the North American economy and the commercial real estate (CRE) sector. Secondly, it presents our strategic focus areas and approach to capture the opportunities presented in the current environment.