Global M&A trends in real estate and real assets

Capital rotation rewrites the M&A playbook

Real estate and real assets investors are entering 2026 from a fundamentally different starting point than in prior cycles: The next phase of M&A across the sectors is expected to be defined not by low interest rates but by a broader asset selection and the ability to capitalise on long-term demographic and technological change.

Capital rotates towards infrastructure-adjacent real assets

Global capital is reallocating. Investors are continuing to move away from traditional assets such as office and retail. Instead, they are prioritising assets supported by long-term structural demand, including those at the intersection of real estate and essential infrastructure such as data centres and other digital infrastructure, renewable platforms, logistics networks, and residential-oriented real estate such as multifamily units, single-family rentals, student housing, and senior living. This convergence between real estate and infrastructure is expanding the opportunity for M&A while raising the bar for execution and value creation.

According to Emerging Trends in Real Estate® 2026, undertaken jointly by PwC and the Urban Land Institute (ULI), data centres remain the top prospect for investment and development conditions, rated higher than the prospects for senior housing, medical offices, and all other asset classes.

AI-enabled platforms gain an edge in M&A

Technology, including AI, is also becoming a more important factor determining competitive advantage. While adoption remains uneven across the sector, investors are increasingly focused on platforms that can leverage data and automation to differentiate performance. Leading investors are embedding AI across deal sourcing, underwriting, asset management, and portfolio strategy, using advanced analytics to identify opportunities earlier, assess risk more precisely, and improve earnings visibility. In M&A, real estate platforms with AI-enabled operating models demonstrate greater scalability and margin resilience, supporting premium valuations and tighter bid-ask spreads. By contrast, businesses or assets with limited technology adoption face valuation discounts, longer transaction timelines, and heightened diligence scrutiny, as buyers price in execution risk and future capital requirements.

AI adoption is accelerating, but remains uneven across the sector

AI adoption to date has focused primarily on internal uses cases such as data analytics, leasing, investment decision-making, and pricing. Early applications are most evident among owners and operators of residential and healthcare-related assets and other assets where AI is being used to enhance customer service and operational efficiency.

Many real estate firms nonetheless remain in the early stages of embedding AI into their operations. According to PwC’s 29th Global CEO Survey, only 29% of real estate CEOs report revenue increases attributable to AI, while 32% report decreased costs, underscoring that AI adoption, while accelerating, is still in a relatively early phase.

Together, these dynamics are redefining real estate M&A. The next wave of deals will be driven less by financial engineering and more by platform scale, operational capability, and technological differentiation, as investors compete for assets aligned with long-term resilience and growth.

Investor interest in Nordic real estate and real assets is accelerating. International capital accounted for slightly more than 35% of total Nordic real estate investment in the third quarter of 2025, up from slightly less than 30% in the same quarter the prior year. Local investors are equally active, deploying capital into operationally intensive sectors where technology adoption and a focus on sustainability offer a competitive advantage. Total transaction volume reached $29.4bn for the trailing 12 months ending September 2025, a 29.3% increase year over year.

This deal activity reflects the Nordics’ growing appeal as one of Europe’s most attractive regions for real estate and real assets investment. The region benefits from a combination of digital maturity, energy abundance, and policy stability that is increasingly scarce across other developed markets, positioning it as a preferred destination for investors seeking resilience and scalable platforms.

Structural demand drivers are reinforcing this investment thesis. As global AI workloads intensify, access to reliable low-carbon energy, deep engineering talent, and highly digitalised societies, such as those in Sweden and Finland, is becoming increasingly important. Hyperscalers, infrastructure funds, and private capital are competing for strategically located land and energy-adjacent assets, while logistics developers and residential operators are scaling platforms designed to meet shifting demographic pressures. According to Eurostat’s short-term population projections, the Nordic region is expected to increase 7.7% between 2025 and 2050, significantly outpacing the Eurozone average of 1.3%, supporting sustained demand for long-term housing and related social infrastructure.

Across Sweden, Finland, Denmark, and Norway, the alignment of renewable power availability, advanced technology ecosystems, and transparent regulatory frameworks is translating into M&A activity across data centres, electrification networks, renewable platforms, logistics hubs, and purpose-built residential solutions. Looking ahead in 2026, the Nordics stand out as a proving ground for the future of real assets, where digital infrastructure, energy security, and housing needs converge to support sustained real estate M&A activity.

An uneven M&A recovery, but a broader opportunity set

Real estate M&A is expected to regain momentum in 2026 as pricing clarity improves, refinancing pressures surface, and investors shift from defensive positioning to selective deployment. While bid-ask spreads have constrained activity over the past two years, recent rate adjustments and maturing debt profiles are bringing more participants back to the table. According to MSCI, although distress has expanded, lender recovery outcomes have improved, with average loss rates on defaulted loans declined 21% in the third quarter of 2025.

The recovery is expected to be uneven. Activity will concentrate in sectors with durable demand and transparent income profiles, including data centres, logistics, and affordable housing, where pricing has reset and operational scalability is clear. Recent transactions, such as Tritax Big Box’s £1,035m acquisition of Blackstone’s UK logistics portfolio and Blackstone’s £489m takeover of UK industrial property landlord Warehouse REIT, highlight investor conviction in income-stable industrial assets. In digital infrastructure, Keppel DC REIT’s JPY 82.1bn purchase of a Tokyo hyperscale data centre underscores accelerating investor demand tied to AI and cloud growth.

By contrast, traditional asset classes such as office and retail will continue to face limited buyer pools, with transactions occurring primarily at materially adjusted pricing or where there is potential for conversion to an alternative use. Capital will deploy selectively, favouring assets for which confidence, data visibility, operational capability, and technological advantage are the strongest.

Cross-border investment accelerates real estate M&A

The US remains a central anchor of global real asset capital flows, but cross-border allocations into Europe are increasing. According to MSCI, based on transaction data through the third quarter of 2025, investors deployed nearly $40bn of capital for real estate investment outside their home continent. The UK became the top destination for capital with investment, rising 12% year over year to more than $22bn, driven largely by industrial acquisitions; the US and Germany rounded out the top three destinations with $21bn and $11bn of inflows, respectively. Interest rate policy, currency volatility, and relative financing conditions continue to influence the pace and direction of these capital flows, with foreign exchange dynamics shaping both deal timing and transaction structuring.

Looking ahead, cross-border investment is expected to be a key driver of real estate M&A in 2026 as global investors pursue diversification, scale, and access to sectors unavailable in their home markets. US investors are increasing allocations to Europe, particularly the Nordics, the UK and Germany, where digital infrastructure, renewable platforms, and residential sectors offer compelling growth opportunities. This trend is reflected in transactions such as Apollo’s acquisition of a pan-European data centre platform from STACK Infrastructure. Singaporean and Canadian capital are also expected to remain highly active, targeting long-duration, inflation-linked income. Currency dynamics, regulatory alignment around decarbonisation, and the pursuit of an early-mover advantage in AI and energy transition assets are likely to further accelerate cross-border dealmaking.

Taking the long view reshapes dealmaking

Long-duration institutional capital is becoming a defining force in real estate M&A. Insurers and defined benefit pension systems are increasingly directing premiums and retirement contributions towards private markets to better match long-dated liabilities, enhance yield, and improve portfolio resilience. Within private markets, real assets—and particularly real estate and infrastructure—are benefiting from growing allocations to both equity and private credit strategies.

Private credit has become a critical channel through which this capital is being deployed. Insurers and pension investors are increasing exposure to real estate-backed private debt, preferred equity, and structure credit solutions that offer downside protection, inflation linkage, and predicable cash flows. This capital is supporting acquisitions, refinancings, and platform growth at a time when traditional bank lending remains constrained, effectively acting as a catalyst for M&A activity across operational and infrastructure-adjacent assets.

In 2025, QuadReal announced the launch of a £2.5bn debt platform in the UK and Europe, with the expanded platform focusing on direct lending to key sectors including multifamily, student housing, data centres, industrial and self-storage. This expansion underscores how institutional investors are using private credit to gain exposure to real assets aligned with demographic and technological change.

In 2026, this capital pool is expected to remain a reliable source of funding for real estate M&A, supporting the continued reallocation of capital towards operational, technology-enabled real assets.

Real estate M&A has continued to trend at levels below the long-term average. Deal values for the first nine months of 2025 were up 6% on the prior year period, with volumes down 8%. Trends varied by region:

• In the Americas, transaction volumes declined by 4% in the first nine months of 2025, although values increased 15% year over year, primarily due to an improving interest rate environment and, more recently, reduced policy uncertainty. 
• Deal volumes in Europe, the Middle East, and Africa (EMEA) were down 8%, while reported deal values increased 3%, largely reflecting US-dollar translation effects rather than underlying growth. The decline in EMEA deal volume is primarily driven by a lower number of residential and hotel deals in the UK. 
• Deal volumes in Asia Pacific decreased by 12% during the first nine months of 2025, with deal values remaining flat. In the third quarter of 2025, transaction values increased in Australia, but declined in China, reflecting each country’s different local market conditions.

Real estate M&A in 2026 will be shaped by broader investment mandates and deeper strategic insight as the industry shifts from a valuation reset to a race for capabilities. While bid-ask spreads are narrowing across most sectors, transaction volumes are unlikely to return to pre-2022 levels. As a result, dealmaking will increasingly concentrate in platforms and asset classes aligned with technological adoption, demographic resilience, and the energy transition. For dealmakers, success will depend on moving early to identify scalable platforms, securing differentiated capabilities through M&A, and allocating capital to assets with a longer-term operational and transformation lens.