Yet these perceived constraints, and its dual nature — potential for bond-like income with equity-like value — underpin its diversification potential. This article draws on Nuveen Real Estate’s research across the U.S., Europe and APAC to make the case. 

The $12.5 trillion investable global real estate market is far from homogeneous. Three regional universes define the landscape: the Americas, over 40%; EMEA, approximately 30%; and APAC, over a quarter. Developed markets account for $11.1 trillion, so stock is concentrated in a few mature economies.1 

Just seven countries — the U.S., China, U.K., Japan, Germany, France and Australia — represent approximately 75% of the global investable universe. The U.S. alone accounts for over half that subset and commanded around 44% of global transaction volumes between 2007 and 2025, underscoring the concentration risk of a purely domestic American strategy. 

These regions differ structurally. The U.S. leans toward alternative sectors and residential while Europe retains a larger office and retail opportunity. APAC has vibrant listed markets, with developing Asia overrepresented in the listed universe relative to its total stock share2. Unlisted real estate makes up 60% of the global total, with open-ended core pooled funds the largest share. 

For an illiquid asset class, capital mobility across geographies is critical. The U.S. is unrivalled in transaction value, but Europe and APAC differ. European cities account for a disproportionately large share of the 150 most liquid cities globally — London, Paris, Berlin, Stockholm and Zurich are reliable anchors. In APAC, Tokyo and Seoul each account for about a quarter of their national economies3; Tokyo leads on liquidity, with Seoul, Sydney, Shanghai and Hong Kong also prominent.

City liquidity fluctuates substantially: markets that appeared highly liquid in benign conditions have suffered sharp reversals during stress, such as Dublin, Madrid, Barcelona, San Francisco, Las Vegas, Seattle and Sydney. This argues for diversification across multiple liquid markets rather than concentration in a few pools. In APAC, 60% to 70% of prime stock is held by domestic investors with strong holding power, so pricing volatility is more contained during stress, such as during COVID-19. 

Currency fluctuations are more likely to amplify portfolio volatility than dampen it. The eurozone partially mitigates this, with approximately 70% of European transactions in euros across 21 member states — a structural advantage for pan-European exposure. In APAC, some economies have a soft dollar peg, though prolonged yen weakness since 2021 has weakened total return performance in U.S. dollar terms. 

Risk premiums vary across markets and sectors, and target returns should aim to compensate for the full spectrum of risks. Across developed markets they range from approximately 1.9% to 4.3%, rising sharply in emerging economies. Offices and hotels typically carry higher required returns than stable residential and industrial assets.

Read the full ‘Thought Leadership’ article at the link below