Real estate rebounds but challenges ahead

Introduction

Real estate investors have faced unusually high volatility in recent years, so building a balanced portfolio has proved a challenge.

Here, Moore real estate and construction experts give their insight into some of the key property markets across the world.

United Arab Emirates

Investor demand for luxury residential property in Dubai is booming,  driven by an average 20% increase in both sales values and rental income between 2023 and 2024 for homes in prime locations.

We also see a great deal of interest in mixed-use developments, especially for projects with strong funding structures that are ready for use and for green, sustainable, smart buildings.

Clients tend to avoid highly speculative off-plan projects and properties in oversupplied or less desirable locations and also developments with high running and maintenance costs.

Corporate tax was formally implemented in the UAE in 2025 and that has had a significant impact on real estate ownership structures, particularly where both onshore and offshore vehicles are involved.

Companies holding real estate assets, whether onshore or offshore, must now submit audited financial statements and tax returns. In response to this shift, we increasingly advise clients to use foundations as part of their ownership and succession planning strategy.   

United Kingdom

The UK market is primed to shift further towards the German model of residential properties, with a much higher proportion of purpose-built rental projects.  Currently, there is relatively little buy-to-rent property available in the UK, so these projects will attract investment.

Data centres and life sciences hubs are part of the government’s narrative of making Britain an “AI superpower”.  We see a belief that more of these developments will be required – and that we may even come to depend on them for economic prosperity – as a factor in keeping rents and values high.

When it comes to more conventional office and retail, most investors will avoid this property class. However, there are plenty with a good understanding of value potential in these assets who can take advantage of current low values to pick up good deals. This will be particularly true in the secondary office space.    

Our advice to clients is to make sure they have an adaptable model of how UK tax increases might affect their portfolios – and a clear exit strategy if changes to the fiscal regime would adversely impact them. 

United States

We anticipate continued interest in mixed-use and multi-family developments that capitalise on the increasing need for housing and the desire for integrated live-work-play environments. From an investment viewpoint, these developments represent improved land-use efficiency and the potential for increased and diversified revenue streams.

Conversely, we expect investors to be cautious with traditional office space (especially Class B/C properties). Clients are prioritising assets that can adapt to demographic shifts, ESG standards and tax-incentivised redevelopment opportunities.

The US economy is facing a lot of uncertainty. The most recent federal tax legislation, passed in the summer of 2025, is mostly favourable for real estate and construction through provisions related to bonus depreciation, an extended opportunity zone programme and a permanent qualified business income deduction.

However, there is uncertainty about the impact of new tariffs imposed on imported materials like steel and aluminium which are expected to increase costs for construction projects.

Our discussions with clients focus on data. That helps to structure investments to maximise available credits and defer gains, where possible. There are other important strategies to protect cash flow and preserve depreciation benefits.

Italy

This year marks a turning point for the Italian property market. However, growth remains modest and selective: this is not a boom, but a return to stability.

Sales are growing again, supported by more favourable credit conditions and demand that never completely disappeared. In the rental market a shortage of supply, combined with increasing labour and university mobility, is pushing rents upwards, especially in urban centres and other attractive locations.

The Italian property market is maturing: less speculation, more attention to quality and sustainability. Gradual increases in transactions and prices are expected in the coming years, a key element being redevelopment of the building stock.

Most Italian properties need energy efficiency and modernisation work, driven by European regulations and tax incentives. For investors, it will be essential to focus on well-located properties with features in line with new housing needs.

Jersey

Our clients are expecting a bounce-back in office space as businesses reign back on working from home. We also have clients looking at investing in senior living accommodation as the population ages. 

The structuring of investments in ground leases is one area where changes in legislation and the political tide have impacted the appetite to invest going forward.

The German property market is one of the indicators that economists monitor to assess the state of the wider economy of the European Union. Here two of the network’s experts asses its current state.

CAIRO CASIRAGHI, tax partner at Moore TK in Mannheim, says commercial and logistics assets are popular, while retirement homes are expected to see increased demand in future. Developers need to review their corporate structures as there have been significant changes in legislation recently that mean some older entities may require adaptation.   

Meanwhile, CHRISTIAN SPIER, partner at Intaria in Munich, is attracted to ESG-rated housing. However, older real estate that is less green but occupies a prime location with upgrade potential is also on his radar. Industrial real estate is to be avoided, in his view.

Despite the challenges of the last few years, those that made smart choices in their selection of property assets are proving an age-old truism: real estate and construction remain a sound long-term financial investment.