What are the emerging trends in real estate in 2025?

In the latest episode of Urbcast developed together with Urban Land Institute, I had a pleasure to talk to Lisette Von Doorn — the CEO of the Urban Land Institute (ULI) Europe, who was in Copenhagen to share her expertise on trends in real estate and urban development. Lisette has an enormous background in the sector, and her insights are useful for anyone interested in the future of cities and urban landscapes.

What is Urban Land Institute?

As Lisette explained — Urban Land Institute is a global network of real estate professionals interested in urban development, planning, design, and investment. With 50,000 members worldwide, ULI provides a platform for knowledge exchange and professional growth. The organization brings together professionals from both the public and private sectors to exchange knowledge and tackle challenges facing the real estate industry.

ULI has its roots in the United States, where it was founded almost 90 years ago. While the majority of its members are based in the U.S., Europe has seen rapid growth, currently with around 5,500 members. ULI's mission is to drive transformative impact in cities and communities, and collaboration through national councils and local chapters across many countries. 

ULI Europe's challenges

One of the most pressing challenges Lisette raised is the need to cater to Europe’s diverse market. With 15 different countries under the ULI Europe umbrella, the real estate market is often shaped by varying languages, cultures, and regulations. Despite these differences, what unites members is their desire to learn from how things are done elsewhere, particularly in overcoming shared challenges.

In Denmark, for example, ULI’s visibility has grown significantly in the past 3 to 5 years. While Denmark may not yet be as established as other countries in the ULI network, the increasing cross-border activity—particularly foreign investors coming into the market—has raised interest in joining the organization.

Copenhagen as a leading example of urban development

When discussing urban development, Lisette emphasized Copenhagen’s success as a model for high-class urban planning. Copenhagen’s development over the last two to three decades stands as an example of how cities can evolve by integrating sustainability, human-scale design, active transport, and economic development.

However, Lisette reminds that Copenhagen’s success didn’t come overnight. It was the result of leadership and a willingness to take incremental steps—often learning from setbacks along the way. She points out that Copenhagen’s transformation is a confirmation of the importance of leadership and the mindset that drives long-term change.

Though Copenhagen has become an icon of sustainable urban development, Lisette also highlights that there are still challenges ahead. For instance, the large-scale development of areas like Ørestad, which initially did not meet expectations, serves as a reminder that even the best-laid plans face problems.

C Change: a key initiative for decarbonizing real estate

One of the initiatives that Lisette is personally involved in is C Change, an effort to decarbonize real estate. As part of ULI’s mission, C Change focuses on addressing the barriers to achieving sustainability in real estate—particularly the lack of collaboration between various sectors, outdated valuation methods, and skills gaps.

In the real estate sector, the challenge lies in the implementation of decarbonization plans. Lisette notes that while many roadmaps and action plans are already in place, the real bottleneck comes when organizations attempt to make tangible progress. The C Change initiative aims to bring together key stakeholders—occupiers, landlords, public and private sector players—to identify and overcome these obstacles.

The initiative is designed to focus on key areas such as integrating sustainability into real estate valuations and making the business case for decarbonization. Given the current economic climate, where construction costs are high, and interest rates are rising, it's vital for real estate professionals to understand that the cost of doing nothing is substantial. In the long term, taking action on decarbonization not only helps preserve the value of buildings but also mitigates future risks.

Lisette emphasizes that C Change is driven by collaboration. Many real estate players are already engaged in sustainability efforts, but the next step is to accelerate progress through cooperation and knowledge sharing.

Emerging Trends in Real Estate: insights and optimism for 2025

The key part of our discussion and the reason Lisette was in Copenhagen was the Emerging Trends in Real Estate report, co-published by ULI and PwC. It shows that the industry has evolved through unprecedented challenges over the past five years. From the pandemic to rising construction costs, geopolitical instability, and climate change, the real estate landscape has been transformed. 

As Lisette says: Yet, there is room for optimism.

A challenging yet promising landscape

The past few years have tested the resilience of the real estate market, with global events exerting pressure on interest rates, inflation, and project feasibility. Despite this, 2024 has brought some hope. Interest rates began stabilizing mid-year, fostering cautious optimism among industry professionals. However, many challenges remain, particularly in the realms of transaction volumes and construction activity.

Architects, often the first to feel the pulse of the market, play a crucial role in these developments. They experience the direct impact of projects pausing during downturns and are equally poised to witness a resurgence as activity picks up. 

This signals a positive trajectory as we approach 2025.

Structural changes: challenges and opportunities

Real estate is not only cyclical but also subject to significant structural shifts. Demographic trends such as aging populations, urbanization, and migration are reshaping cities. Simultaneously, technological advances and digitalization—including AI's impact on workspaces—are compelling industries to rethink how spaces are designed, developed, and utilized.

These shifts also underscore the necessity of sustainability. Climate change demands adaptation strategies to mitigate the effects of extreme weather events, from flooding to droughts. Beyond decarbonization, the focus is shifting toward creating buildings that are flexible and adaptable for future uses, using lower-carbon materials and sustainable construction methods.

The role of architects and designers

Although I started this season of the podcast focusing on the real estate, the urban design and architecture will still play a big role. That’s why we discussed the role of architects, designers, and urban planners. According to Lisette, they are essential in aligning real estate with evolving needs. From retrofitting offices to prioritizing residential projects, they are at the forefront of innovation. A key challenge remains scalability—transferring successful sustainable practices across different regions with varying regulations and cultural contexts.

Notable examples of innovation include the use of natural materials like straw, which not only contribute to sustainability but also positively impact human health. Such forward-thinking approaches highlight the transformative potential of design in driving systemic change.

Outlook for 2025: cities to watch

Based on insights from over 1,100 industry professionals, the forecast for 2025 suggests a continued focus on major metropolitan hubs like London and Paris, alongside rising stars such as Madrid and German cities that benefit from strong infrastructure and urban development investments.

From a sectoral perspective, residential developments—including student housing, senior living, and co-living concepts—are gaining traction, addressing social challenges like loneliness and the rise of single households. Other areas of interest include data centers and energy infrastructure, sectors requiring careful public-private collaboration to balance sustainability with operational demands.

Collaboration and optimism

Governments, developers, architects, and investors must work together to unlock opportunities while navigating challenges. As optimism grows, the industry must remain active in addressing persistent clouds on the horizon, ensuring that 2025 brings more sunshine than rain.

As we look toward the new year, the message is clear: optimism, adaptability, and collaboration will define the future of real estate. And for architects and designers, the opportunity to lead this transformation has never been greater.

📚 If you want to dive deeper in the Emerging Trends in Real Estate report, you can download it here.