Aging Populations and Digitalization: How these Trends are Reshaping Real Estate Markets for the Long Term

Structural trends are among the most important drivers of real estate demand. Investors who deliberately align their portfolios with such secular developments increase the likelihood of generating robust returns across different economic cycles.

Two themes are currently in particular focus: demographic change, with aging populations driving demand for senior housing and medical office buildings (MOBs), and the exponential growth in data usage, which is significantly increasing the need for data centers.

At first glance, senior housing and data centers may appear to have little in common. Yet both are supported by the same underlying mechanisms: structurally growing demand combined with constrained supply. This creates compelling opportunities for investors.

Aging societies – stable cash flows

Demographic change remains one of the clearest and most persistent structural forces influencing international real estate markets. In many developed economies, large segments of the population are moving into age cohorts associated with different housing needs and higher healthcare utilization.

In the United States, the number of people aged 65 and over is projected to rise by more than 40% by 2050 – from 58 million in 2022 to approximately 82 million¹. This development is generating structurally strong demand for purpose-built senior living communities and healthcare-oriented real estate overall. Senior housing fundamentals have improved markedly since the COVID-19-related decline in occupancy, indicating that demand is growing faster than available supply².

High construction costs and more restrictive financing conditions are slowing new development, thereby reinforcing favorable supply-demand dynamics. As a result, operators are positioned to achieve rising revenues, while investors benefit from enhanced cash flow stability.

Medical practices in transition

The market for medical office buildings also benefits from demographic aging. Structural changes in healthcare systems are accelerating this shift. As populations age, healthcare utilization increases, while systems are increasingly moving treatments away from hospitals toward outpatient and community-based care models³.

This strengthens demand for modern, well-located medical office buildings with strong tenant covenants and long lease durations. Compared with traditional office properties, medical office assets tend to offer more resilient income streams, higher tenant retention, and limited exposure to the working from home trend.

Data centers: One of the fastest-growing sectors in real estate

Alongside these demographic-driven segments, data centers rank among the strongest structural growth themes in global real estate. Cloud migration, increasing digitalization, robotics and automation, streaming and content services, and above all the boom in artificial intelligence are rapidly accelerating demand for suitable facilities. AI applications already accounted for around 25% of global data center usage in 2025⁴.

At the same time, new supply is increasingly constrained by structural bottlenecks, particularly limited access to additional power capacity and the shortage of available land in mission-critical availability zones.

In the United States, vacancy rates in core markets remain very low, and new projects are often pre-leased long before completion⁵. Tenants are increasingly seeking larger, more power-dense facilities and committing to longer lease terms, underscoring the mission-critical nature of these assets.

A similar picture is emerging in Europe. In the FLAPD markets of Frankfurt, London, Amsterdam, Paris, and Dublin, supply remains heavily constrained⁶. While these restrictions may limit short-term expansion, they are likely to enhance the long-term value of well-located and operationally efficient data centers by reinforcing scarcity and pricing power.

Senior housing, medical office buildings, and data centers illustrate how demographic change and digital transformation can drive rental growth in global real estate markets.

Both trends create structurally growing demand alongside constrained supply – a combination that supports sustainable rental growth.

For long-term real estate strategies focused on stable income and secular growth drivers, this environment presents attractive opportunities.

SFP AST Global Core Property, a multi-manager managed by Swiss Finance & Property Ltd, provides access to these structural growth themes through its global, diversified approach and active management strategy.

_Sources: 

_{¹ Mather, Mark, and Paola Scommegna. Fact Sheet: Aging in the United States. Population Reference Bureau, 9 Jan. 2024, www.prb.org/resources/fact-sheet-aging-in-the-united-states/ 
² CRED iDaily. Senior Housing Occupancy Reaches 10-Year High. (Recovery, occupancy, supply constraints). 
³ PwC & SkyView Advisors. Medical Office Building Market Outlook and Trends. (MOB fundamentals). 
⁴ JLL. 2026 Global Data Center Outlook — AI Structural Transformation and Share of Capacity. (AI share of data center demand in 2025). 
⁵ CBRE. Global Data Center Trends 2025. CBRE Research, 24 June 2025, www.cbre.com/insights/reports/global-data-center-trends-2025 
⁶ CBRE. European Real Estate Market Outlook Mid-Year Review 2025: Data Centres. CBRE Research, Jan. 2025, www.cbre.com/insights/books/european-real-estate-market-outlook-mid-year-review-2025/data-centres}