Multipolarity is now the defining characteristic of global commerce
Foreign direct investment (FDI) has always been a bellwether of global economic confidence. When capital flows freely across borders, it signals trust in stability, growth and integration. But the current FDI arena is increasingly characterised not by confidence, but by caution — and the implications stretch far beyond boardrooms to the bricks and mortar of global real estate.
According to UNCTAD’s World Investment Report 2025, global FDI fell by 11% in 2024, the second consecutive annual decline. Beneath headline numbers, the details reveal a fragmented world. Inflows into developed economies dropped 22%, with Europe seeing a staggering 58% plunge. Multinationals are no longer deploying capital on long-term bets. Instead, they are focused on risk management amid geopolitical tensions, trade fragmentation and industrial policy rivalry.
The constant barrage of US tariffs, and the erratic nature of Trump’s policymaking, underscores just how fragile the investment climate has become. Multipolarity – the shift from a US-centric trade order to a fragmented, transactional system – is now the defining characteristic of global commerce. For FDI, the consequences are profound. Supply chains are being redrawn, investment strategies recalibrated, and new alignments forged outside Washington’s orbit. India’s growing cooperation with China and Russia is just one example of how countries are repositioning themselves in response.
One sector where the impacts are already visible is industrial real estate. Once viewed as a safe haven amid e-commerce growth and supply chain resilience drives, in the US, the sector is now feeling the chill of policy risk. CommercialEdge’s June industrial report showed leasing decisions delayed, new deliveries absorbed slowly, and construction starts on track for their lowest level since 2018.
Vacancy rates have risen to 8.5%, up nearly 300 basis points year-on-year. At the same time, port activity is softening: cargo volumes at Los Angeles fell 25% below forecast in May, reflecting weakened international trade and rerouted supply chains.
Opportunities in regions and subsectors
For investors, these trends cut both ways. While volatility undermines returns in logistics-heavy portfolios, raising financing risks and delaying exits, it creates opportunities in regions and subsectors positioned to benefit from reconfigured trade flows, such as Southeast Asia’s logistics hubs or Africa’s emerging special economic zones.
What does this mean for the real estate sector more broadly? One lesson is that geography matters more than ever. With FDI growth diverging so sharply across regions, asset allocation can no longer be a broad bet on “emerging markets”. Southeast Asia may thrive, while Latin America struggles. Africa may look buoyant in the data, but inflows hinge on single projects. Real estate investors need sharper regional intelligence than at any time in recent memory.
Second, we all must accept that policy risk is a new constant. Tariffs, industrial subsidies and national security reviews are no longer exceptions; they are structural features of the landscape. Investors must evaluate not just market fundamentals but also exposure to sudden shifts in trade policy.
Third, resilience in an era of disruption requires flexibility. Real estate strategies must adapt to shorter investment horizons and more fluid tenant demand. This may mean more emphasis on modular warehousing, multi-purpose facilities, or assets aligned with domestic consumption rather than cross-border trade. In a multipolar world defined by tariffs, trade fragmentation and investor caution, resilience will depend not only on scale, but agility, intelligence and a willingness to navigate volatility as the new normal.
Courtney Fingar is the founding partner of Fingar Direct Investment and a contributing editor to Real Asset Insight.
