Global Capital Repricing: Foreign Investment, Currency Risk, and U.S. Real Estate in a Fragmenting World

Introduction

Global real estate investors are navigating a fragmenting world where geopolitical rifts and monetary policy divergence are reshaping capital flows. After years of hyper-globalization, cross-border investment strategies must now account for sanctions, trade decoupling, and volatile currency markets. Inbound foreign capital into U.S. commercial real estate (CRE) and outbound U.S. investment overseas are both being recalibrated in this new environment. Investors – from limited partners (LPs) and family offices to sovereign wealth funds – face the challenge of repricing risk amid rising foreign exchange (FX) volatility and higher hedging costs. This article offers an institutional, opinionated perspective on how foreign exchange risk, central bank policy divergence, and geopolitical shifts (Russia sanctions, U.S.-China decoupling, ASEAN de-dollarization) are influencing real estate deal underwriting, return expectations, and portfolio allocations in mid-2025. The goal: to help global sponsors and investors position themselves as capital flows are re-routed and repriced in today’s world.

Divergent Central Bank Policies Drive FX Volatility and Hedging Costs

A key macro theme in 2025 is monetary policy divergence. The U.S. Federal Reserve led a rapid tightening cycle in 2022–2023, lifting short-term interest rates to multi-decade highs, while other central banks lagged or are now easing. The result has been a persistently strong U.S. dollar and costly FX hedging for international investors (prea.org) (bis.org). High short-term U.S. rates mean a wide yield differential versus the euro, yen, and yuan, so any investor converting those currencies into dollars (or hedging dollar exposure) faces a substantial drag. In fact, the BIS reports that the strength of the dollar and elevated dollar interest rates have discouraged many non-U.S. investors from hedging USD exposures, given the expense involved (bis.org). Hedging costs have risen particularly sharply for Asian and European investors since 2022, as U.S. rates climbed above their home rates (bis.org).

One stark example is Japan. With the Bank of Japan keeping yields near zero, the yen weakened significantly against the dollar. Japanese institutions investing in U.S. core real estate (often targeting ~4% yields) found currency hedging costs of up to 500 basis points – completely erasing cash returns (prea.org). Many Japanese investors, traditionally conservative, have responded by either waiting for yield gaps to narrow or shifting into higher-yield strategies (value-add, opportunistic, or real estate debt) to offset the hedging drag (prea.org). Similarly, other Asia-Pacific investors are favoring strategies like private credit, where the predictable cash flows make FX hedging more manageable (prea.org). European investors, whose central banks (ECB, BoE) also raised rates but to lower peaks than the Fed, face somewhat less extreme hedging costs, yet still must price in a substantial currency basis if they fully hedge dollar investments. Elevated hedging costs and a strong dollar have led some foreign buyers to time their entry into U.S. assets carefully, or even leave some currency exposure unhedged if they anticipate dollar depreciation (prea.org).

For U.S.-based investors deploying capital abroad, policy divergence can be a double-edged sword. On one hand, the strong dollar has boosted their purchasing power in Europe and Asia. In 2022–2023 the dollar’s surge made overseas real estate appear “on sale” to American buyers, spurring high-profile U.S. acquisitions in the U.K. and elsewhere (jll.ca). (For example, U.S. firms made an $884 million bid for a British REIT and funded £600+ million in U.K. housing development amid favorable exchange rates (jll.ca). A strong greenback means that when U.S. investors eventually repatriate proceeds, they could realize extra gains if foreign currencies have weakened – as Japanese sellers of U.K. property recently enjoyed (jll.ca). However, the flip side is that U.S. investors’ foreign holdings can lose value when translated back to dollars if the dollar strengthens further (home.treasury.gov). Indeed, in the year through mid-2024, the dollar’s 4% rise meant U.S.-owned foreign assets lost value in USD terms, even as foreign investors holding U.S. assets saw their values hold up in dollar terms (home.treasury.gov). This currency see-saw is prompting U.S. investors to more actively hedge or tactically time currency conversion. Notably, interest rate differentials can actually benefit Americans hedging certain foreign investments: for instance, a U.S. investor in euro-denominated assets may earn a positive carry on a currency hedge because U.S. rates exceed Europe’s (bis.org). Savvy investors are monitoring forward exchange rates and considering local-currency financing to mitigate these risks. The bottom line is that FX moves – driven by disparate central bank paths (e.g. a paused Fed vs. an easing ECB or a still-dovish BoJ) – have become a key factor in global real estate strategy, directly impacting deal viability and returns.

Foreign Capital Inbound to U.S. Real Estate: Cautious Revival

Despite currency challenges, the United States remains a magnet for global real estate capital. After a lull in 2022–2023, cross-border investment into U.S. CRE is rebounding as valuations adjust and investors seek safe havens. In the first quarter of 2025, global direct real estate transaction volume surged 34% year-on-year, and notably cross-border investment jumped 57% – the highest Q1 level since 2022 (jll.com, jll.com). In the second half of 2024, total cross-regional inflows to North America were up 40% from a year prior, reaching about $9 billion (cbre.com). This renewed inbound activity has been led largely by European investors taking advantage of improved debt liquidity and pricing in the U.S. market (cbre.com, cbre.com). Prime industrial and logistics assets and even some high-quality offices in gateway cities like New York, Boston, and San Francisco have drawn particular interest (cbre.com). After several years of price corrections in U.S. real estate, many overseas institutions feel that a “turning point” is near and that values have reset to a more attractive entry point (prea.org, prea.org).

That said, foreign investors are entering selectively and with eyes wide open. FX risk and hedging costs are front of mind for any non-U.S. investor in America today. Short-term U.S. rates are still high, which raises the cost of hedging dollar exposure and can chip away at yield (prea.org). The strong dollar in recent years has also given pause to some would-be buyers, who fear overpaying at an unfavorable exchange rate (prea.org). Yet many long-term players remain bullish on U.S. real estate despite these short-term currency worries. In conversations with global investors, LaSalle Investment Management notes an ongoing conviction that the U.S. offers unmatched market depth, innovation hubs, and demographic advantages – factors that outweigh transitory FX swings (prea.org, prea.org). In fact, the U.S. comprises roughly one-third of the global institutional real estate universe by value (3.6 times larger than the next market, Japan) (prea.org), and it consistently ranks among the most transparent and liquid markets. These fundamentals underpin foreign LPs’ strategic allocations to the U.S., even if they temporarily dial back when hedging costs spike.

Importantly, the composition of inbound capital has shifted in our fragmenting geopolitical context. Traditional heavyweights like Canada and Europe still account for the bulk of foreign U.S. investment, while capital from certain Asia-Pacific countries has pulled back. Japanese investors, as discussed, have been less active given yield and currency dynamics that severely compress their returns (prea.org). Major Korean institutions – once among the largest foreign buyers in U.S. property – have also slowed deployments, partly due to overallocation issues and troubles in their existing U.S. office holdings (prea.org). China’s once-formidable outbound investment has largely dried up as Beijing maintains capital controls and U.S.-China relations have soured. To the extent Chinese investors can invest abroad, many now favor Europe over the U.S. to avoid political friction (prea.org). Furthermore, the U.S. itself is imposing barriers: as of 2024, 23 U.S. states have either enacted or proposed laws restricting foreign real estate purchases, often singling out Chinese buyers (prea.org). This domestic political trend – ostensibly for national security – is another factor diverting some capital that might have flowed into U.S. assets.

On the other hand, capital from the Middle East and other “neutral” regions has filled some gaps. Flush with petro-dollar liquidity from high oil prices, Middle Eastern sovereign wealth funds have been increasing allocations to U.S. and global real estate, targeting everything from logistics portfolios to tech-oriented assets. And in a notable example of geopolitically driven re-routing, Russian capital – essentially shut out of the West by sanctions – has poured into alternative markets like Dubai. An estimated $6.3 billion of Russian money flowed into Dubai real estate after the 2022 Ukraine invasion, a more than tenfold increase that turned Dubai into a prime haven for sanctioned or wary Russian elites (icij.org, icij.org). While that surge bypasses the U.S., it exemplifies how sanctioned wealth seeks refuge in friendlier jurisdictions, which could indirectly benefit U.S. partners in the Gulf but also means some global capital is permanently redirected away from Western markets. Overall, inbound investment to U.S. CRE in 2025 is defined by a cautious recovery – robust in volume but selective in nature. Foreign investors are concentrating on sectors with secular strength (industrial, “living” residential, data centers, etc.) and on structures (e.g. joint ventures, private credit) that best manage the currency and rate risks of the day (cbre.com)(prea.org).

Outbound U.S. Investment: American Capital Chasing Global Opportunities

Just as foreign investors eye the U.S., American capital is venturing abroad in search of yield and diversification. U.S. pension funds, private equity firms, and REITs have been increasingly active in Europe and Asia-Pacific, taking advantage of dislocations and favorable forex conditions. In the second half of 2024, Europe remained the largest recipient of cross-regional real estate investment globally – and notably, North American investors accounted for most of that inbound volume (cbre.com). U.S.-based investors have swooped into the U.K. and continental Europe to acquire assets at what they perceive as attractive valuations after Europe’s 2022–2023 correction. A strong dollar (relative to the euro and pound) effectively gave U.S. buyers a discount on European properties in USD terms, and some marquee deals materialized as a result (jll.ca). American opportunistic funds, for instance, made bold moves on British REITs and financed build-to-rent housing deals, capitalizing on the currency edge (jll.ca). As one JLL advisor noted, “currency fluctuation has a significant impact” on cross-border strategies – and recently, the relative strength of the dollar galvanized U.S. buyers to move on U.K. opportunities that might not have penciled out a year earlier (jll.ca).

Beyond Europe, U.S. investors have also been active in Asia-Pacific. Cross-regional flows into APAC jumped over 200% year-on-year in late 2024, led by North American capital targeting markets like Australia and Japan (cbre.com). Australia’s aggressive repricing (sharp increase in cap rates) created a window for value plays, while Japan’s ultra-stable low-rate environment attracted U.S. investors to sectors like logistics, multifamily, and even office (cbre.com). Notably, U.S. firms have acquired Japanese assets while locking in cheap local debt – effectively arbitraging Japan’s low interest rates versus higher yields available on certain properties. By borrowing in yen at low rates, these investors naturally hedge part of the currency risk and benefit from Japan’s “stable debt environment” (cbre.com). Such moves underscore how central bank divergence can be turned into an advantage: U.S. capital is willing to go where financing costs and currency trends work in its favor.

Of course, outbound investment is not without challenges. For U.S. investors venturing into emerging markets or regions with depreciating currencies, FX volatility can quickly erode profits if not managed. Many American institutional investors stick to developed markets (Europe, Japan, Australia, Canada) where currency risk is seen as more tractable and hedging markets are deep. Even in these markets, timing is key. A lesson learned by some U.S. investors in Europe is that when the dollar reverses course (weakens), those who delayed repatriating gains from a sale could see their dollar returns trimmed. This has prompted more nuanced exit planning – e.g., considering when to convert sale proceeds back to USD or whether to leave them in local currency for a period (jll.ca, jll.ca). The current consensus among many U.S. global allocators is to remain unhedged or partially hedged on equity-like real estate bets (accepting short-term currency swings) but to fully hedge income-focused investments to secure the yield spread.

Geopolitics also influences where U.S. capital goes. With U.S.-China decoupling in technology and rising bilateral tensions, American investors have grown cautious on direct investments in China. The Chinese real estate sector’s regulatory turmoil and slowing economy were already deterrents; now add geopolitical risk, and many U.S. institutions prefer to gain exposure to Asia via other markets (such as India, Japan, or Southeast Asia) or through pan-Asia funds that can navigate Chinese opportunities carefully. Moreover, the U.S. government has been contemplating restrictions on certain outbound investments (particularly in sensitive sectors in China), which further chills direct real estate flows. Instead, U.S. capital is gravitating to places seen as geopolitically “safer” or aligned – e.g., increasing allocations to India’s real estate or “friend-shoring” manufacturing facilities in Mexico and Vietnam (often through infrastructure or development deals backed by U.S. private equity). In Europe, U.S. investors are bullish on Western Europe’s prospects as the ECB pivots to rate cuts and economies stabilize. Western Europe is attracting interest thanks to lower interest rates and a likely earlier easing cycle, which could boost property values sooner (institutionalinvestor.com). This macro backdrop, combined with strong fundamentals in sectors like logistics and residential, has American investors anticipating outsized returns in Europe as the recovery there gains traction (institutionalinvestor.com, institutionalinvestor.com).

In summary, U.S. outbound capital is playing an increasingly dominant role in global real estate investment – stepping in where local capital is constrained. Whether it’s buying distressed office towers in London or funding new data centers in Osaka, American investors are exploiting global yield differentials. They just must remain vigilant that currency gains can flip to losses, and that a fragmenting trade environment (tariffs, sanctions, decoupling) means yesterday’s “global” strategy may need new regional twists today.

Geopolitical Fragmentation Reshapes Capital Flows

The macro-financial forces above are occurring against a backdrop of profound geopolitical shifts. In this fragmenting world, investment flows are increasingly influenced by sanctions, alliance blocs, and currency politics – factors that directly bear on real estate capital availability and risk.

Sanctions & East-West Fractures: The sanctions on Russia following its invasion of Ukraine have fundamentally rerouted capital flows. Russian oligarchs and institutions, once active in trophy real estate markets (from London condos to U.S. commercial assets), are now effectively frozen out of the West. As noted, much of that capital diverted to havens like Dubai, causing a luxury property boom there fed by an estimated $6+ billion in Russian money (icij.org). Western investors, in turn, withdrew from Russian real estate and projects, incurring losses and leaving a void filled by Russian state actors or Middle Eastern and Chinese investors. The long-term implication is a more siloed global market: capital from sanctioned countries or their allies circles in one sphere, while Western capital sticks to another. For example, Gulf sovereign funds have strengthened ties with Russia and China, co-investing in projects that U.S. or European capital won’t touch – and vice versa. In real estate, this might mean Middle Eastern or Asian capital taking up stakes in Russian or Iranian development deals, while Western capital flows to NATO-aligned markets in Eastern Europe instead. Sanctions on Russian banks also forced changes in cross-border payment systems (such as Russia’s exclusion from SWIFT), prompting some investors to seek alternatives like cryptocurrency or Chinese payment networks for moving funds – again, introducing new risks and complexity in transactions.

U.S.-China Decoupling: The geopolitical rivalry between the U.S. and China is another driver of capital fragmentation. Chinese outbound real estate investment had already plummeted after 2017 due to China’s capital controls and crackdown on speculative foreign deals. Now, with heightened scrutiny on Chinese investors (as evidenced by U.S. state laws restricting Chinese purchases (prea.org) and Beijing’s focus on self-reliance, Chinese investment in U.S. real estate is a trickle of what it once was. Some Chinese buyers still quietly invest via proxies or in less sensitive assets, but the headline-grabbing acquisitions of hotels and skyscrapers are largely history. Instead, any Chinese capital going abroad prefers regions where it faces less politicization – notably Europe, the Middle East, and parts of Africa (prea.org). Conversely, U.S. (and allied) investors are more wary of deploying money into China. Even beyond real estate, the U.S. government is considering outbound investment screening for China, which could one day encompass real estate if deemed strategic. The risk for global investors is that decoupling may limit diversification opportunities – e.g. an investor might avoid an attractive Shanghai office development due to the political climate, missing out on potential returns but choosing regulatory certainty. Additionally, supply chain “decoupling” or friend-shoring has real estate implications: as manufacturing shifts to countries like India, Vietnam, or Mexico, there is a parallel need for industrial real estate and logistics infrastructure in those markets, and capital is following. U.S. and European investors are teaming up with local partners to build warehouses and factories in these alternative hubs, effectively reallocating capital that might have gone to China into other emerging economies.

De-Dollarization and Local Currency Trends: A quieter but significant trend is the push by various blocs to reduce dependence on the U.S. dollar. In Southeast Asia, for instance, ASEAN nations have launched initiatives to trade in their own currencies more and rely less on the dollar for cross-border payments (thediplomat.com, thediplomat.com). As of 2023, 80–90% of ASEAN exports were invoiced in USD (thediplomat.com), but recent agreements are chipping away at that share. Countries like Indonesia, Malaysia, and Thailand have set up bilateral local currency settlement frameworks, and ASEAN even floated the idea of a common payments network and eventual unified currency framework (thediplomat.com, thediplomat.com). This trend, alongside China’s efforts to internationalize the yuan (e.g. through its CIPS payment system and yuan trade deals), could over time diminish the dollar’s financial ubiquity. For real estate investors, one immediate effect in the ASEAN context is that regional developers and investors are increasingly raising capital in local currencies or via local bonds, reducing the traditional pipeline of recycling trade-surplus dollars into U.S. assets. If Southeast Asian central banks hold slightly fewer dollar reserves, their national pension funds or wealth funds might allocate less to U.S. Treasuries and potentially less to U.S. real estate, at the margin. On the flip side, more local-currency liquidity within ASEAN could boost real estate investment within the region – a form of regionalization of capital flows. We’re already seeing stronger intra-Asian investment: for example, Singaporean and Korean funds investing in Vietnamese or Indonesian projects, sometimes denominated in local currency or yuan. While these moves won’t dethrone the dollar overnight (USD remains dominant in global transactions), they signal a gradual financial decoupling that parallels the geopolitical realignment. Investors should watch these de-dollarization efforts, as they might herald new financing risks (or opportunities) – such as currency mismatches if a project’s revenue is in rupiah but historically would have been funded in USD.

In sum, geopolitical fractures are redefining the pathways of capital. Real estate, being an illiquid and often locally-entwined asset class, is particularly sensitive to these shifts. Capital flows are becoming more regional and politically tinged: friendly nations invest more with each other, while capital from adversarial or sanctioned countries is either blocked or diverted elsewhere. For investors, a key takeaway is the need to incorporate geopolitical risk into underwriting – not only country risk but also the durability of the capital source. Who your co-investors are (and where their money comes from) matters more now; one sanctions announcement can freeze a funding source or force a hurried exit. The fragmenting world requires a higher bar for due diligence on cross-border deals and perhaps a bias toward markets with stable diplomatic ties and rule of law.

Implications for Underwriting, Returns, and Portfolio Strategy

These macroeconomic and geopolitical currents materially influence how investors underwrite deals and allocate their portfolios. Deal Underwriting now routinely includes rigorous FX scenario analysis. Cross-border investors are baking in contingencies for currency moves – e.g., examining deal IRRs under base-case and stress-case exchange rates, and evaluating the cost/benefit of hedging strategies. Many international investors have responded to today’s high hedging costs by demanding higher initial yield spreads on acquisitions to compensate. For instance, a European core fund eyeing a U.S. logistics asset might insist on an extra 50–100 bps on the cap rate to make up for the forward hedge cost on EUR-USD. If that yield isn’t available, they may either pass or choose to invest without a full hedge (taking measured FX risk) to preserve upside. Underwriting models also increasingly assume slower exit cap rate compression in markets where interest rates remain elevated. With long-term U.S. Treasury yields still relatively high in 2025, underwriters are cautious about assuming cap rates will fall and bail out their deals – instead, they focus on income growth and buying at a basis that can withstand some valuation pressure (cbre.com).

Return expectations are being recalibrated globally. Investors are recognizing that the easy gains from cap rate compression and falling rates (which defined the last cycle) are no longer a given. Instead, returns must come from real income growth, value creation, and savvy capital structure management. Currency swings play into this: a foreign investor’s total return can be boosted or reduced by FX changes, so many now set return hurdles with a buffer for currency risk. We see some non-U.S. investors lowering their USD return expectations slightly, acknowledging that a portion of returns might be eaten by hedging or FX loss. Conversely, U.S. investors in Europe are often targeting higher USD-denominated returns on the hope that a future weaker dollar will amplify their gains when bringing money home. In practical terms, this might mean a U.S. investor targets a 15% IRR on a European opportunistic deal, knowing that if the euro appreciates by exit, the IRR could end up higher in USD – but they underwrite to 15% regardless, treating any FX pop as gravy. The emphasis for all investors is on building margin of safety: because FX and geopolitical risks are hard to perfectly predict, deals need more cushion (be it higher going-in yield, lower leverage, or conservative growth assumptions). The days of razor-thin underwriting in cross-border deals are over; a fragmenting, volatile world requires thicker risk-adjusted returns upfront.

Portfolio allocation strategies are also shifting in response to these trends. Global investors are rebalancing which regions and asset types they emphasize. There’s a growing sentiment to “tilt” portfolios toward markets with favorable macro dynamics: for example, some large U.S. institutions have increased their allocation to European real estate, expecting that the ECB’s rate cuts will boost values and that the euro’s relative weakness could reverse, yielding a currency kicker on top of property returns (institutionalinvestor.com, institutionalinvestor.com). Similarly, Middle Eastern and Asian investors (who often invest in USD-pegged currencies or with long horizons) are taking advantage of the U.S. correction to accumulate high-quality U.S. assets at reasonable prices, believing the long-term safe-haven status of the U.S. will reward them (prea.org). On the other hand, certain investors are reducing exposure to markets with rising geopolitical risk or currency instability – for example, dialing back on U.K. assets if worried about post-Brexit volatility, or holding off on China despite attractive yields due to policy uncertainty.

We also observe a trend toward greater portfolio diversification by currency. Rather than measuring all returns in USD (or home currency) terms, sophisticated investors are effectively managing a basket of currency exposures as part of their real estate portfolio risk. Some are happy to hold a mix of USD, EUR, JPY assets, figuring that currency movements can diversify risk (since a drop in the dollar might coincide with gains in their euro assets, and vice versa). Indeed, research suggests that for long-term equity-like investments, leaving some FX exposure unhedged can even out over time due to offsetting volatility (bis.org). Still, most institutions match their liabilities: a Eurozone pension fund will ultimately care about euro-denominated returns, so they will hedge a good portion of U.S. asset exposure despite the cost, whereas a U.S. endowment might leave a European real estate investment unhedged as a strategic bet. The key is that currency is now an asset allocation consideration, not just a transactional afterthought. We’re hearing more investment committee discussions around questions like: What is our net FX exposure? Do we have too much USD risk or too little? Should we intentionally allocate say 10% to assets in Asia for diversification if the dollar weakens? This represents a maturation of global real estate strategy – effectively merging traditional real estate portfolio management with global macro hedging techniques.

Lastly, deal structures and partnerships are evolving. Underwriting now often assumes partnering with local capital to mitigate political and currency risks. For example, a U.S. investor might co-invest with a local European fund for a euro-area deal, sharing currency exposure or using the partner’s lower hedging cost capacity (since a European fund may hedge USD cheaper, if rates invert). In politically sensitive deals, foreign investors are using locally domiciled vehicles (like domestically-controlled REIT structures in the U.S. to appease regulators (prea.org) or focusing on secondary stakes rather than direct control to avoid scrutiny. In essence, everything from preferred deal size, structure, to exit timing is being tweaked to account for the new macro-geopolitical paradigm.

Conclusion: Navigating Repricing in a New Era

We have entered an era of global capital repricing. The convergence of higher interest rates, diverging monetary policies, FX volatility, and geopolitical fragmentation is redefining what “global real estate investing” looks like. The U.S. and other major markets are still attracting cross-border capital, but on new terms – with thicker risk premiums, careful hedging, and selective plays aligned to macro trends. Investors can no longer assume a rising tide of globalization will lift all assets. Instead, discerning strategy is paramount: aligning investments with favorable central bank currents (e.g. riding a rate-cut cycle or locking in low-cost debt), managing currency proactively, and staying alert to political shifts that can open or shut capital spigots overnight.

In our opinion, successful real estate investors in 2025 and beyond will be those who blend real estate fundamentals with macro strategy. They will underwrite with dual lenses – scrutinizing the quality of the asset and tenant, but also the central bank bias and geopolitical context of that market. They will demand adequate compensation for taking cross-border risk, whether through higher going-in yields or creative structuring. And they will maintain agility: if the world further fragments into blocs, investors may need to adjust allocations (perhaps more to domestic or allied markets) to ensure resilience. Conversely, moments of re-connection – say a thaw in U.S.-China relations or an end to a trade war – could present outsized opportunities for those ready to pivot.

What is clear is that currency risk and policy divergence are here to stay as key components of real estate investing. The divergence between the Fed and ECB or PBoC is not an anomaly but a reflection of different economic conditions – and such divergences will likely recur, requiring active FX risk management as a permanent feature of cross-border deals. Meanwhile, the fragmenting geopolitical landscape means investors must keep a pulse on world affairs, not just cap rates and rents. A sanction, an election, or a trade pact can move billions in real estate capital flows, as we’ve illustrated.

For global LPs, family offices, and sponsors, the task is to harness these changes – to find opportunity in dislocation. There is opportunity in the current repricing: asset values in many markets have reset to more reasonable levels, and motivated capital (both inbound and outbound) is increasingly targeting real estate as a stable income play in an inflationary world (institutionalinvestor.com). (institutionalinvestor.com). Indeed, despite all the uncertainty, a recent survey noted almost 40% of global institutional investors plan to increase allocations to private real estate in the next two years, up from 25% previously (institutionalinvestor.com). Real estate’s appeal as an inflation hedge and a provider of tangible yield is intact – but executing on a global strategy requires more finesse than in the easy-money, low-volatility days.

Global real estate participants should stay vigilant and adaptive. By understanding the forces of FX risk, hedging cost, central bank divergence, and geopolitical realignment, investors can better underwrite and position their portfolios for this new chapter. The world may be fragmenting, but capital will always seek opportunity – and those who skillfully navigate foreign investment and currency risk will find that even a fragmented world can offer coherent, profitable investment stories.

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Sources: bradvisors.com, citrincooperman.com, prea.org, bis.org, jll.ca, home.treasury.gov, jll.com, cbre.com, icij.org, institutionalinvestor.com, thediplomat.com

Disclaimer: This article is for informational purposes only and reflects the opinion of the author, not formal advice. It is not intended as investment, tax, or legal advice. All investors should conduct their own analysis and/or consult with qualified advisors before making investment decisions, especially in complex areas like cross-border real estate. The economic and geopolitical conditions discussed are fluid and subject to change.