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In a recent conversation,1 Dominic Silman and Brian Klinksiek revisited LaSalle’s ISA Outlook themes amid 2025’s rapidly developing and unpredictable geopolitical and macroeconomic climate.
Brian Klinksiek (BK):
The theme of our ISA Outlook 2025 was the ‘Dawn of a New Real Estate Cycle’. Looking back six months later, we’ve been through a rollercoaster of policy change with meaningful shifts in the economic narrative. We covered this in two recent Briefing notes. In the first, we recommended that investors “work backwards” from strategic actions that make sense regardless of macropolitical outcomes; in the second, we pointed to signals from key relativities among asset classes, geographies, and sectors. All those recommendations still stand, but we provide a further update on recent developments in our latest LaSalle Macro Quarterly deck (LMQ), which we released today. Thankfully, many of the most extreme US policies – such as the full “Liberation Day” tariffs – have been paused, at least for now. But as we have pointed out, uncertainty itself has a cost.
Beyond the trade war, in the past two weeks a real kinetic war unfolded between Israel and Iran, with the US stepping in as well. This is driving energy price volatility and, in the unlikely case of a severe escalation, could lead to the destruction of energy infrastructure in the region, or to the closure of the Strait of Hormuz, a major chokepoint on the global energy map.2 Both could potentially bring stagflation to the global economy.3 In the background, the global political calendar has also been very busy – we’ve seen election results in Canada, Australia, South Korea and Poland, as well as the new German coalition’s shift toward higher spending and investment. Given all this change, where do we stand today? Do we still think it’s the dawn of a new real estate cycle?
“It’s helpful to take a step back and ask: What is actually changing and what is likely to stay the same?”
Dominic Silman (DS):
As you say, it’s been quite a six months! It’s helpful to take a step back and ask: What is actually changing and what is likely to stay the same? For example, despite the movement and uncertainty, it bears mentioning how little has so far changed on the ground in property markets, which we will talk about later.
Among the many changes, we should also ask which are likely temporary and which are permanent. April’s extreme volatility has so far proven temporary; markets are a lot calmer today.4 It reminds me of that British Second World War poster: ‘Keep Calm and Carry On’. Are we carrying on? Certainly. Are markets actually keeping too calm recently, especially given still elevated uncertainty? I think there’s a risk of too much calmness, and too much of an instinct to assume that everything always works out absolutely fine and reverts to “normal”.
Want to read the rest of the conversation? Download the PDF
Footnotes1 LaSalle has utilised JLL GPT to transform a transcript of a recorded verbal conversation that is documented in this publication. JLL GPT is a secure, in-house generative artificial intelligence (AI) interface that draws on the underlying models from OpenAI’s ChatGPT and other AI firms.
2 Source: Signum Global Advisors, Piper Sandler
3 Source: Oxford Economics
4 As indicated by a significant moderation in indicators of market volatility, such as the VIX for US equities and the MOVE index for US government bonds. Source: LaSalle analysis of Refinitiv data.Important notice and disclaimer
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