Global investors to deploy $144bn into commercial real estate in 2026

• Offices re-emerge as the top asset class for CRE investors, while over half of investors target Retail assets
• Interest rates and occupier demand outweigh geopolitical risks in investor decision-making
• The UK and Germany top destinations for global capital

Knight Frank’s Active Capital survey captures the views and investment intentions of 119 of the world’s largest global real estate investors, representing over $1.4 trillion of AUM. The research projects a rebound in global investment into commercial real estate in 2026, with falling interest rates, greater confidence in occupier demand, and demographic trends set to drive investment activity in key markets.

87% of survey respondents by AUM intend to increase direct CRE investment in 2026, with 62% expecting to be net buyers of real estate assets, signalling strong acquisition appetite. Just 12% of those surveyed expect to be net sellers of real estate.  

The UK (a target for 60% of respondents) and Germany (52% of respondents) emerge as the top two destinations for investors globally. Of the top themes influencing investment decisions, interest rates were most cited (54%), followed by occupier demand (40%), bond yields (31%) demographic changes (31%) and AI (30%). 20% of investors referenced geopolitical risk (international) as a concern, but only 15% said domestic politics was a key influence on investment decisions.

Return to offices and Core as investors become increasingly confident in future workplace trends

The survey points to a return to the market for investors in Core strategies, with $37 billion of planned investment targeting Core assets (26% of all planned investment), as falling interest rates make Core increasingly attractive relative to fixed-income strategies. $33bn of planned investment is targeted to Core Plus (23%), $27bn to Value Add (19%) and $40bn to Opportunistic strategies (28%)[1]. 68% of respondents, collectively planning $94bn of investment, stated they will consider joint ventures or capital partnering to make investments in 2026, demonstrating a willingness to collaborate with specialists and to diversify across sectors and the risk spectrum.

Offices have re-emerged as the most targeted asset class (69% of investors) while over half (56%) of respondents are planning to invest in retail assets, indicating opportunities as the sector emerges from its right-sizing phase.  Investors are, however, increasingly differentiating between well-located, ESG-compliant assets that can meet modern occupier demands and those facing long-term obsolescence.

65% of investors are targeting Living assets in 2026, attracted by demographic tailwinds and defensive income streams. Multifamily is the most sought-after Living investment, while Single Family Rental (SFR) has seen a notable increase in interest from investors, with 31% of investors targeting these assets but just 22% currently having exposure to them. While there remains some uncertainty around the direction of SFR policy in the US, the underlying demand for these assets globally is expected to endure.

Industrial & Logistics also remains a high priority for deployment, targeted by 63% of investors, supported by persistent supply chain challenges, steady e-commerce penetration in select markets, and growing defence and security-related requirements. Data centres are being targeted by 31% of investors, while 19% of investors are targeting infrastructure assets, despite just 12% currently having exposure.

Nick Braybrook, Partner and Global Head of Capital Markets, said: “This is empirical evidence of a turnaround in the global real estate investment market. The nuances within the findings are fascinating - after several torrid years for the global office market, the undeniable return of the occupiers has finally spurred a return of the investors, and the sector has gone from almost last place to now first. The return of core investors is the missing piece of the jigsaw, being the pricing that the rest of the market builds from. Capital remains selective, concentrating in locations where confidence in values, liquidity and exit prospects are highest, but in those markets the growing imbalance between buyers and net sellers points to clear competitive tension. The wide spread of target returns reported in the survey also bodes well for overall global turnover levels going forward.

Victoria Ormond, CFA, Partner and Head of Capital Markets Insight at Knight Frank, said: "Interest rates are the single most influential factor shaping real estate investment decisions, followed by occupier demand and bond yields. In the year ahead, investors are targeting early-cycle opportunities alongside longer-term thematics, set against a backdrop of global uncertainty. Many are looking beyond short-term volatility to pursue a mix of repriced assets and sectors set to benefit from long-term structural tailwinds.

"Joint ventures and capital partnerships are emerging as critical tools for accessing scale, managing complexity and entering new geographies and sectors. These structures are particularly relevant for operational segments such as infrastructure, data centres, senior living and single-family rental – areas driven by demographic and technological shifts but requiring specialist expertise. Beyond enabling access, partnerships may also help resolve capital misallocations arising from the downturn. While investors are increasingly prepared to look through geopolitical noise, rigorous sensitivity analysis and scenario planning remain essential to mitigate risk and build resilience."

[1] Some survey respondents did not specify their allocations.