Global real estate markets remain under pressure as cyclical weakness and structural headwinds persist, while competition for capital across private markets intensifies, according to a MSCI report.
Institutional investors are increasingly favoring infrastructure and private credit, with real estate allocations declining for the first time in more than a decade, according to MSCI. Higher yields and stronger downside protection in debt strategies have inverted traditional risk-return dynamics, forcing real estate equity to justify its role within portfolios. At the same time, blurred boundaries between real estate and infrastructure underscore the need for more granular, sector- and asset-level analysis. While 2026 is likely to remain challenging, pricing adjustments and stabilizing capital markets are beginning to create selective re-entry opportunities for investors focused on risk-adjusted returns within integrated real-assets allocations.
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