The concept of ‘core’ real estate has long been a cornerstone of institutional investment: prime location, top-quality asset, long-term lease, and creditworthy tenant. But post-2023, that definition is being reexamined. The combination of rising interest rates, geopolitical volatility, ESG pressures, and changing tenant behavior is forcing investors to reconsider what truly constitutes a “core” asset in today’s real estate market.

The traditional appeal of core assets—low risk and predictable income—has come under pressure as yields have compressed and inflation has eroded real returns. In response, many investors are broadening their scope, moving toward a more dynamic and adaptable interpretation of core. Assets once considered “core-plus” are increasingly being viewed as acceptable components of a core allocation, provided they meet certain structural criteria: strong location, resilient demand, and potential for long-term value creation through ESG alignment or operational improvement.

At the same time, the definition of “prime” is evolving. In the office sector, for example, core is no longer just about location and lease length—it’s about energy efficiency, occupier experience, and adaptability to hybrid work. In residential, build-to-rent projects in non-prime but fast-growing urban areas are now part of many core portfolios. Logistics assets with smart infrastructure, data centers, and even select hospitality and living assets are being reclassified as core by institutional investors seeking stable income and long-term demand resilience.

Technology and ESG are now essential filters. Properties that lack green certifications, digital infrastructure, or flexibility for future regulatory shifts are at risk of obsolescence—even if they are located in historically prime areas. Investors are increasingly underwriting not just on cash flows, but on alignment with future-proofing criteria. In this new environment, resilience, not rigidity, is the defining trait of a core asset.

At CG Capital Europe, we work with investors who are navigating this shift with intent. We believe that the post-2023 real estate landscape demands a more nuanced, forward-looking understanding of core. Today, core is not static—it’s strategic: a combination of quality, adaptability, and long-term relevance.

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