REITs and Commercial Real Estate: Toward a Modest Recovery in 2025

Summary: After two years of tension (post-pandemic context and economic slowdown), commercial real estate is showing signs of stabilization in 2025. REITs (Real Estate Investment Trusts) are seeing their fundraising slowly pick up again but remain attentive to the quality of tenants and geographic diversification. This article reviews the main figures for the first quarter of 2025, promising sectors (logistics, data centers), and prospects for wealth investors.

A Pivotal Year for Commercial Real Estate

After a 2023-2024 period marked by investor caution and a decrease in transactions, 2025 looks to be a year of gradual stabilization for commercial real estate. The end of the interest rate hike cycle initiated by central banks and a gradual return of economic confidence are giving the sector a new lease on life, even if the recovery remains moderate.

REITs: Fundraising Restarts

Real Estate Investment Trusts (REITs) have gone through two complex years, marked by a decline in net inflows and increased attention to liquidity. The first quarter of 2025, however, shows encouraging signs:

• Net inflows: +8% compared to the last quarter of 2024, nearly €2.1 billion collected in three months.
• Financial occupancy rate: Stabilizing around 91%, a reassuring level after the tensions seen in 2023.
• Share prices: Stagnating or slight corrections for some REITs, helping to restore savers' confidence.

Management companies nevertheless remain vigilant: tenant selection and lease strength are more central than ever to investment strategies.

Promising Sectors: Logistics and Data Centers Lead

Not all segments of commercial real estate are experiencing the same momentum. While traditional office space is still struggling to regain its full appeal, other sectors are standing out:

• Logistics: Driven by the growth of e-commerce and supply chain reorganization, logistics remains the most dynamic sector. Specialized REITs report occupancy rates close to 98% and increased tenant demand.
• Data centers: The increased digitalization of the economy is boosting the construction and rental of data centers, a booming market especially in the Paris region and around Lyon.
• Health and education: Assets related to health (clinics, laboratories, medical centers) and education are holding up well, supported by structural needs and quality tenants.

Geographic Diversification and Tenant Quality

To secure yields and limit risks, REITs are strengthening their geographic diversification. Investments in Northern Europe (Germany, Netherlands, Belgium) are increasing, offering exposure to more resilient rental markets. Tenant selection remains a key criterion, with a strong preference for solid mid-sized companies and international groups.

Outlook for Wealth Investors

In 2025, wealth investors are gradually regaining confidence in REITs, which continue to offer an attractive risk/return profile, with expected yields around 4.5% to 5% depending on the vehicle. Nevertheless, caution is still advised:

• Favor diversified REITs exposed to multiple asset classes and geographical areas.
• Prioritize transparent and experienced management companies.
• Include liquidity as a selection criterion, especially in a still-fragile market context.

For savers seeking additional income and protection against inflation, REITs remain a valuable part of a balanced wealth management strategy, provided quality and diversification are prioritized.

Conclusion

After two turbulent years, commercial real estate and REITs are showing signs of recovery in 2025, even though caution is still warranted. Growth in fundraising, the emergence of promising sectors such as logistics and data centers, and rigorous portfolio management offer interesting prospects for wealth investors. Economic trends and monetary policies remain to be watched, as they could still influence the pace of this modest but promising recovery.