Commercial Real Estate Market to grow by USD 427.3 Billion (2025-2029), driven by global commercial sector growth, AI-powered market transformation - Technavio

NEW YORK, Jan. 27, 2025 /PRNewswire/ -- Report with the AI impact on market trends - The global commercial real estate market size is estimated to grow by USD 427.3 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  4.6%  during the forecast period. Growing commercial sector globally is driving market growth, with a trend towards increasing marketing initiatives. However, rising emphasis on remote work and online shopping  poses a challenge. Key market players include Atlas Technical Consultants, Boston Commercial Properties Inc., Brookfield Business Partners LP, CBRE Group Inc., Dalian Wanda Group, DLF Ltd., Keller Williams Realty Inc., Lee and Associates Licensing and Administration Co. LP, Link Asset Management Ltd., Marcus and Millichap Real Estate Investment Services Inc., MaxWell Realty Canada, NAI , Nakheel PJSC, Onni Contracting Ltd., Prologis Inc., RAK PROPERTIES, Segro Plc, Shannon Waltchack, TCN Worldwide, and WeWork Inc.

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Market Driver

Commercial real estate market is witnessing significant trends in various sectors. Retail and hospitality segments are thriving, with GST bringing uniformity and ease of doing business. Smart Cities Mission is driving demand for commercial spaces, especially in IT and engineering sectors. Boutique businesses and start-ups prefer co-working spaces and flex centers. Technology development, including virtual property tours, artificial intelligence, and virtual reality, is transforming commercial real estate. The vaccine campaign and stable economic environment are boosting confidence among business owners, leading to increased lease signings for offices, industrial, and multifamily properties. E-commerce and manufacturing sectors continue to expand, requiring more industrial and logistics spaces. Hospitality sector is adapting to future workplaces with innovative designs and amenities. Developers are leveraging data analytics to offer customized solutions to tenants. Overall, the commercial real estate market is evolving, offering exciting opportunities for businesses across industries. 

In the commercial real estate market, vendors employ an integrated marketing communication strategy to sell their products effectively. This approach utilizes various channels such as newspapers, magazines, social media, and TV advertisements. A creative campaign follows the advertisement, which includes Internet pre-roll, social media, and blogging programs, and an interactive website. Social media plays a crucial role, with visual content driving customer engagement and fostering online brand communities. Vendors also utilize Instagram to exhibit product usage ideas. This comprehensive strategy enhances brand authenticity and recognition, generating consumer interest in the company's offerings. 

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• Commercial real estate market faces various challenges in sectors like retail and hospitality due to the impact of GST and the ongoing pandemic. Developers are focusing on Smart Cities Mission to attract businesses, particularly in IT, engineering, manufacturing, and e-commerce. Boutique businesses and start-ups prefer co-working spaces and flex centers. Technology development brings virtual property tours, artificial intelligence, and virtual reality. A stable economic environment is crucial for business owners leasing offices, industrial spaces, or multifamily properties. The vaccine campaign boosts confidence in the hospitality sector. Future workplaces will prioritize data analytics, technology integration, and flexible workspaces. The industrial and logistics segment benefits from the growth of e-commerce. Overall, the commercial real estate market requires agility and innovation to navigate these challenges.
• The commercial real estate market is undergoing significant shifts due to technological advancements and changing consumer behaviors. Online shopping's rise has decreased the demand for traditional retail spaces, leading to less foot traffic in physical stores. Similarly, remote work trends have impacted the need for office spaces. Businesses are now focusing on flexible office layouts and integrating technology like virtual reality to adapt. This transformation challenges conventional commercial real estate models, particularly traditional office spaces designed for in-person collaboration and set work hours.

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This commercial real estate market report extensively covers market segmentation by  

1. End-user 
• 1.1 Offices
• 1.2 Retail
• 1.3 Leisure
• 1.4 Others
2. Channel 
• 2.1 Rental
• 2.2 Lease
• 2.3 Sales
3. Geography 
• 3.1 APAC
• 3.2 North America
• 3.3 Europe
• 3.4 South America
• 3.5 Middle East and Africa

1.1 Offices-  The global commercial real estate market is experiencing a notable growth in the offices segment. This trend is driven by shifting work patterns and corporate demands. Flexible work arrangements, hybrid models, and increasing technological usage are influencing the need for office space. Businesses prioritize contemporary, adaptable, and tech-savvy workspaces to attract talent. Co-working spaces like Regus and WeWork, providing flexible office solutions, are prominent examples. Major corporations, such as Google and Amazon, invest in innovative office layouts to foster teamwork and employee satisfaction. The offices end-user segment is projected to expand from 2024 to 2028, reflecting the evolving workspaces to meet modern business practices. This progress presents opportunities and challenges for the global commercial real estate market, leading to moderate growth during the forecast period.

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The commercial real estate market is experiencing a significant transformation, driven by various factors. Retail and hospitality sectors are adapting to the new normal with contactless transactions and virtual experiences, thanks to technology development and the integration of Artificial Intelligence. The GST implementation has streamlined taxation, making transactions smarter and more efficient. Smart City initiatives are revolutionizing commercial real estate, with a focus on sustainable, tech-driven spaces. IT and Boutique businesses are thriving in this environment, leveraging virtual property tours to expand their reach. Lease negotiations are becoming more flexible, with Sel negotiating favorable terms for business owners. Office spaces are evolving, with conventional offices giving way to coworking spaces and flexible work arrangements. The Industrial and Logistics sector is booming, driven by the need for efficient supply chain solutions. The Real Estate Consultancy industry is providing valuable insights to navigate this dynamic market. The Smart Cities Mission is shaping the future of commercial real estate, with a focus on sustainable, tech-driven infrastructure. Multifamily properties are also benefiting from these trends, with a growing demand for smart, connected living spaces. Overall, the commercial real estate market is undergoing a digital transformation, offering exciting opportunities for innovation and growth.

Commercial real estate markets are experiencing a significant transformation, driven by various factors. The retail and hospitality sectors are adapting to the new normal with the implementation of GST and the rise of e-commerce. The Smart Cities Mission is boosting the demand for commercial spaces, particularly in IT and engineering sectors. Boutique businesses and start-ups are thriving in co-working spaces and flex centers. Technology development, including virtual property tours, artificial intelligence, and data analytics, is revolutionizing the industry. The vaccine campaign and stable economic environment are instilling confidence in business owners, leading to increased lease signings for offices and industrial spaces. The future workplaces will be characterized by advanced technology and flexible arrangements. Multifamily and hospitality properties continue to attract investors, with the hospitality segment showing promising growth in the post-pandemic world. Industrial and logistics spaces are in high demand due to the increasing trend of online shopping.

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• End-user
• Offices
• Retail
• Leisure
• Others
• Channel
• Rental
• Lease
• Sales
• Geography
• APAC
• North America
• Europe
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio