Commercial Real Estate Market Set to Near $1 Trillion Amid Office and Retail Shifts

A new report forecasts the global commercial real estate market to grow from about $447 billion in 2025 to roughly $703 billion by 2035, a compound annual growth rate of 4.6 %. Data centres are the strongest driver, boosted by AI and cloud expansion, while hospitality is expanding fastest at 9.2 % CAGR. Asia‑Pacific accounts for 39 % of market share and North America is growing most rapidly. Rising interest rates continue to pressure lower‑quality office assets, but hybrid work and e‑commerce are creating lasting demand for higher‑grade, energy‑efficient office space and logistics facilities.

In the United Kingdom, landlords are reassessing older secondary‑office buildings and high‑street retail premises. The pandemic‑induced shift to hybrid work has softened demand for costly, less efficient office stock, prompting many owners to consider repurposing or converting these properties. Retail landlords face similar pressures as traditional high‑street demand wanes, leading to a broader re‑thinking of town‑centre uses.