Research Reports

Data centers have rapidly moved from a niche real estate subsector to a critical pillar of the global economy. Driven by cloud computing, artificial intelligence (AI), digitalization, and onshoring of advanced manufacturing, demand for data center capacity has continued to accelerate globally. At the same time, the sector faces unprecedented constraints, most notably access to power, transmission infrastructure, land, and specialized labor. This paper explores five key themes shaping today’s data center investment landscape: 1) Whether current demand reflects a durable structural trend or an emerging AI bubble, 2) how data centers are powered, and why power availability is now the binding constraint, 3) why all data centers are not created equal, 4) what debt markets are signaling about risk, resilience, and capital structure, and 5) whether data centers represent the convergence of real estate and infrastructure into a new hybrid asset class. While volatility and uncertainty persist, our assessment is that data centers, particularly those located in high-quality markets, supported by stable power access, and aligned with long-term cloud demand, remain strategically compelling investments in a capacity-constrained world.

Evaluate real estate investment opportunities on the horizon in European markets with our bi-annual sector reports, featuring: cross-quadrant perspectives from our real estate investment professionals, current conditions and outlooks for core real estate sectors, and non-traditional sectors such as data centers.

Evaluate real estate investment opportunities on the horizon in U.S. markets with our bi-annual sector reports, featuring: cross-quadrant perspectives from our real estate investment professionals, current conditions and outlooks for core real estate sectors, and non-traditional sectors such as data centers.

AI is redistributing occupier demand for quality assets, accelerating a widening gap between high-specification, infrastructure-ready assets and commoditized space that is facing pressure. A clear ‘flight to quality’ trend is emerging as occupiers become more selective with AI-driven requirements. For investors, this reinforces a selective investment approach, where core capital should prioritise office and business parks with enduring demand visibility, while value-add opportunities can unlock relevance through asset repositioning.

Swiss real estate saw robust demand in 2025 and remains attractive in 2026, supported by stable cash flows, diversification advantages, and its defensive role in volatile market conditions. Residential demand remains strong. While the supply side recovers, housing remains scarce, shown in continuously falling vacancies and rising rents. Switzerland’s resilient economy also underpins selective opportunities in commercial real estate through active asset management despite global headwinds.

Industrial real estate was once widely considered an undifferentiated asset class, though in recent years has grown into a highly nuanced and segmented sector of commercial real estate. In the post-COVID investment landscape “small-bay industrial” grew as a household term, gaining popularity among investors for its economic resilience and alignment with growth industries like e-commerce, manufacturing and technology. Despite this growing interest the segment still remains unclear to many, largely due to a lack of available small-bay data and the operational complexity required to manage large small-bay portfolios—creating very few new entrants to the space. At the same time, mid- and large-bay industrial assets have continued to evolve separately, each offering distinct characteristics, risk profiles, and use cases. Together, these segments form the modern industrial landscape, differentiated by building size, unit configuration, and tenant composition.

The industrial sector has undergone a structural demand shift over the past 15 years, resulting in rising rent premiums for newly built facilities in densely populated areas with strong highway access. Rent growth premiums have now stabilized. As a result, infill warehouses may not outperform regional distribution hubs this cycle, which is a change from most of the last 15 years. While population density, highway access and building age will remain important, the next decade will likely reward assets that are technologically adaptable, resilient to economic cycles and positioned to benefit from supply constraints and new patterns of industrial activity.

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.