Principal Real Estate is a top 10 global real estate manager1 with $105.2bn in assets under management2 as of 30 September 2025. Providing access to capabilities across the spectrum of public and private equity and debt, our in-depth market knowledge, experienced teams, and extensive connections across all four quadrants of real estate, help us to maximise opportunities and find the best relative value on behalf of our clients.
Principal Real Estate built its reputation as a knowledgeable and trusted adviser to institutional investors on six decades of commercial real estate experience3. We adopt a consultative partnership approach with clients, providing choice and customisation to help meet any unique risk and return objective.
With seasoned teams of investment professionals around the globe in the United States, Europe, Singapore, and Australia delivering comprehensive research and market coverage, clients can benefit from our distinct 360° perspective of real estate space and capital markets.
We provide a range of investment capabilities from traditional core strategies to opportunistic property development and redevelopment.
- Core and core-plus
- Value-add and development
- Traditional property sectors
- Specialist property sectors
- Data centres
- Hotels
- Residential
- Healthcare
In Europe, we have long-standing relationships in most major markets and are able to access real-time market information, track deal flow, and understand regional market dynamics.
1 Managers ranked by total worldwide real estate assets (net of leverage, including contributions committed or received, but not yet invested; REOCs are included with equity; REIT securities are excluded), as of 30 June 2024. “The Largest Real Estate Investment Managers,” Pensions & Investments, 7 October 2024.
2 Includes clients of, and assets managed by, Principal Real Estate Europe Limited and its affiliates. Assets under management figures shown here may include model only assets.
3 Principal Real Estate became registered with the SEC in November 1999. Activities noted prior to this date above were conducted beginning with the real estate investment management area of Principal Life Insurance Company and later Principal Capital Real Estate Investors, LLC, the predecessor firm to Principal Real Estate Investors, LLC.
Sector forecasts
INDUSTRIAL:
Heightened geopolitical uncertainty and trade negotiations have tempered occupier demand in the first half of 2025. Rental growth has moderated, and vacancy rates have edged higher, driven by older stock. Looking ahead, the industrial sector’s fundamentals are set to improve, amid structural tailwinds such as e-commerce expansion, warehouse automation, and increased fiscal spending on infrastructure and defence projects. At the same time, rising operational costs and tightening sustainability requirements will continue to shift occupier demand toward energy-efficient facilities with high specifications and strong ESG credentials.
OFFICE:
The broader office sector continues to face structural headwinds from hybrid working, tightening ESG requirements, and evolving occupier needs. Nonetheless, early signs of stabilization have emerged in the first half of 2025, with yields, leasing activity, and rents improving across several core markets. Performance remains highly polarized, with occupier demand increasingly concentrated in modern, high-quality offices located in prime submarkets. Meanwhile, new construction starts have fallen to a fifteen-year low, suggesting that supply pressures should ease materially over the coming quarters
RESIDENTIAL:
The residential sector remains highly attractive, supported by its countercyclical nature and structural supply–demand imbalance. Following a peak-to-trough decline of 15–20%, residential values have begun to recover across mainland Europe, while conditions remain more challenging in the UK due to persistent inflation and higher interest rates. Looking ahead, household formation and urbanisation trends are expected to continue driving demand, while on the supply side, housing delivery is set to slow due to elevated construction costs, limited availability of urban land, and tighter regulations.
RETAIL:
The retail sector is stabilising, with fundamentals approaching equilibrium after several years of store closures and rationalisation. Retail sales, footfall, and vacancy trends point to a sector on a more sustainable recovery path, with retail parks and shopping centres on firmer ground, while high street retail remains comparatively weaker. Looking ahead, a combination of low inflation, declining borrowing costs, and record-low unemployment should continue to support consumer confidence and retail spending.
OTHER:
Healthcare: Market conditions in the real estate healthcare sector have improved during 2025, ending a prolonged period of operational pressure, rising insolvencies, and restructuring. Care operators reported a more favourable environment, primarily due to normalising debt market, positive price effect, and rising occupancy above pre-pandemic levels.
Student housing: Rising student enrolments, increasing international mobility, and declining rental housing stock across several European markets continue to support the case for purpose-built student accommodation. Bed provision rates in key university cities remain low, keeping most assets near full occupancy. While rental growth is expected to moderate, the sector’s performance should remain robust.
Hotel: Hotel performance remained positive, driven by resilient leisure demand, particularly in Southern Europe. Corporate travel demand continued to be subdued as businesses have yet to return to pre-pandemic travel patterns. The outlook remains broadly positive, although forecasts have been downgraded due to fewer than anticipated American travellers, depreciation of the U.S. dollar, and persistent trade uncertainty.
Investment principles & strategy
We offer clients a wide range of capabilities through our investment platform, and strive to deliver consistent, risk-appropriate performance and strong relative value.
Our investment strategy and research process sits at the heart of our ability to assess relative value globally, both within and across quadrants, and to deliver on investment solutions. Our investment teams rely on our analyses and insights to inform their investment decisions.
A relative value approach to investing
We make all our investment management decisions using a relative value approach. This team-based, time-tested process includes rigorous, in-depth research and focuses on maximizing investment returns that match our clients’ risk tolerances and preferences. We base our investment decisions on a combination of bottom-up asset analysis and top-down economic and sector views. In a constantly evolving marketplace, innovation is critical, whether it’s sustainable investing or “next-generation” investment strategies.
Comprehensive market coverage, holistic understanding
Our experience in all four quadrants of the commercial real estate market—public equity, private equity, public debt, and private debt—gives us a holistic understanding of the market. We draw not only from the focused experience of each quadrant team, but also the insights gained from cross-team collaboration.
This helps us make a comprehensive risk-adjusted return assessment, across all quadrants, and enables a tailored approach to investing client capital based on their specific risk/return objectives.
Strategic corporate development
Principal Real Estate will continue capitalizing on the experience of our global team with an emphasis on providing strong investment performance and service to existing and new clients.
Over the next three to five years, the firm anticipates growth of real estate debt and equity assets under management, subject to investor demand as well as the availability and pricing of attractive real estate investments.
We remain committed to our core values, being highly client-centric and investment solution oriented, maintaining a fiduciary mindset, and adhering to a disciplined approach to real estate investing.
Performance verification
Principal Real Estate Investors, LLC claims compliance with the Global Investment Performance Standards (GIPS®).
Compliance Statement
© 2025 Principal®, Principal Financial Group®, Principal Asset Management, and Principal and the logomark design are registered trademarks and service marks of Principal Financial Services, Inc., a Principal Financial Group company, in various countries around the world and may be used only with the permission of Principal Financial Services, Inc. Principal Asset ManagementSM is a trade name of Principal Global Investors, LLC. Principal Real Estate is a trade name of Principal Real Estate Investors, LLC, an affiliate of Principal Global Investors.
