In its latest Global Capital Markets reports, Savills has examined the likely short and long-term impacts of recent macroeconomic and geopolitical uncertainty, concluding that globally the fundamentals of theoffice and industrial marketsremain sound long-term. 

In the office sector, Savills says that while Q1 volumes remained low at US$ 35 billion globally, there is some momentum building behind office investment, with the average yield across 15 major global markets remaining unchanged this quarter for the first time in three years.Interest from larger institutional and cross border capital in the offices sector is also rising: combined, these groups increased their market share of transactional activity to nearly 50% in early 2025, up from around 40% last year.  

The possible introduction of tariffs, and the knock-on wider macroeconomic uncertainty, could have a short-term impact on leasing activity and thereby investor sentiment, says Savills. However, overall office occupational demand is largely driven by the services sector, which is not subject to tariffs, so the international real estate advisor expects there to be little long-term effect. Indeed, according to Savills, economic uncertainty may mean some office occupier groups have need for further space, while lack of supply boosts the case for investing in prime offices in an environment where development will be even more challenging:  

“There is every chance that some office occupiers may benefit from an increase in trade and policy uncertainty”,says Oliver Salmon, Director - Global Capital Markets, Savills World Research. “A number of global banks, for example, reported a strong Q1, underpinned by trading revenues during recent market turbulence. Additionally, uncertainty feeds into weaker development activity, compounding the shortage of good quality offices in most global cities. Owning a prime central CBD office with a good covenant and long lease therefore might just be the one of the more profitable real estate investments in this environment.”   

The industrial & logistics market, Savills says, is the most likely real estate sector at risk from disruption and tariffs, potentially derailing the 3% year-on-year increase (to US$41billion) in investment the sector saw globally in Q1 2025. The US occupational market is likely to see the most disruption, while East and South East Asian export markets also appear vulnerable, given they operate large trade deficits with the US. However, Australian and European markets, with their more balanced trading relationships with the US and tighter pipeline of domestic industrial & logisticsspace, should be relatively resilient, according to Savills. Long-term, an increase in nearshoring activity may also bring some benefits.  

Rasheed Hassan, Head of Global Cross Border investment at Savills, comments: “For industrial investors, Europe’s various land and planning constraints provide an important backstop to returns and it’s still generally a tenant-friendly market, with an average regional vacancy rate of 6%. But a scarcity of sales remains a key differentiator in the market, and explains why we continue to see downwards pressure on prime industrial yields in core markets, as buyers compete for the best assets. In APAC, where there are more question marks over the impacts of tariffs, we were seeing generally improved conditions forinvestors, with concerns of oversupply in South Korea and Japan easing and major cross border investors becoming more active in the region, with a weight of capital very evident in Australia. While some investors may now pauseto await the outcome of current trade negotiations, long-term the industrial & logisticssectorremains resilient.”