Mastern Investment Management Releases Report on Global Real Estate Investment Landscape Outlook

On August 20, Mastern Investment Management, a leading alternative investment asset management firm, announced the publication of its report "Mastern Insight - From Pause to Play," which forecasts the global commercial real estate market for the second half of this year.

The R&S (Research & Strategy) Division, Mastern Investment Management's research team, authored the report under the subtitle "Capital Reconfiguration in a Divided World in 2025." The report provides an in-depth analysis of how capital is being reallocated to structurally demand-driven sectors amid interest rate and policy risks in overseas commercial real estate markets.

According to the report, the overall market recovery remains limited, with capital inflows focused on specific sectors and regions where price adjustments have been completed. While the office sector's recovery has been delayed, transactions are concentrated in "selected sectors" such as rental housing and logistics, which have visible demand and accessible financing.

It is also noteworthy that in the first quarter of this year, capital inflows expanded mainly into student accommodation (PBSA), data centers, and logistics. In contrast, investments in office and retail sectors have not received favorable assessments.

GP strategies are also shifting. While U.S. capital remains the largest source of supply, investment volume in the first quarter of this year decreased by 19% year-on-year. Singaporean GPs more than doubled their investment scale, strengthening investments in logistics and residential sectors within APAC countries such as Korea, Japan, and Australia.

Overseas GPs are shifting from a simple sector-based approach to "strategy-based investments" that consider combinations of country, sector, and strategy. Structurally demand-driven assets such as mixed-use and living sectors are emerging as so-called "new core" assets, being redefined as strategic investment targets.

Capital is also being selectively concentrated by city. Tokyo ranked first in transaction volume for the first quarter of this year, driven by large-scale retail deals, followed by New York, LA, Dallas, London, and Sydney. Inflows into non-core cities are slowing down.

The report points out that although benchmark interest rates are showing signs of stabilizing downward, borrowing costs remain at their peak, which continues to weigh on asset profitability. In the U.S., commercial real estate (CRE) borrowing costs have solidified at around 6%, and existing leverage-based investment strategies are facing profitability limits. The current price adjustments are interpreted as being driven mainly by funding costs and financial market volatility, rather than by real demand.

Ji Hyojin, Executive Director of the Global Research Team at Mastern Investment Management, stated, "The commercial real estate market remains in a limited recovery phase amid high interest rate fatigue and policy uncertainty. Rather than interest rate forecasts, structural analysis and risk diversification capabilities are key, and strategic collaboration between investors and GPs will be crucial to achieving results."

This content was produced with the assistance of AI translation services.