Shifting ground: why geopolitics is redrawing the Corporate Real Estate map
As trade relationships fracture, sanctions expand and governments take a closer interest in strategic assets, companies are starkly rethinking where they choose to operate
For decades, the fundamentals associated with corporate location strategy were relatively linear. Businesses looked for places that offered access to customers, skilled workers or rather competitive operating costs. Political stability mattered, as it always has, of course, but it was often treated as more of a background consideration; rather than central factor at play.
That calculation is becoming more complicated. Trade disputes, sanctions, export controls, investment restrictions and intensifying competition between major economies is changing the conditions under which multinational businesses operate. A location that once appeared commercially attractive may now carry a risk that is difficult to price into a conventional property decision.
For corporate real estate teams, this creates a different kind of responsibility: understanding not only whether a location works today; but whether it will remain viable if that political and economic environment changes tomorrow.
When geography is calculated into business risk
Geopolitical risk is no longer confined to companies operating in conflict zones or politically unstable markets. Governments today, are increasingly using economic policy as a strategic instrument; with tariffs, sanctions and foreign investment affecting where business can invest, and thus how they operate.
The OECD’s 2025 Foreign Direct Investment Regulatory Restrictiveness Index highlights the scale of this shift. More than 80% of OECD member countries now operate a mechanism for screening foreign investment citing national security grounds, compared with around 55% at the end of 2020. The scope of these reviews has also widened to include critical technology as well as other strategic assets.
For businesses, this means that acquiring, developing or operating property can become entangled in questions of national security, ownership and regulatory approval. The implications extend across the property portfolio. Manufacturing facilities, research campuses, logistics hubs and data centres can all represent strategic assets, particularly where they support critical industries or sensitive tech.
The footprint is part of the supply chain
The growing connection between geopolitics and property is particularly visible when looking at supply-chain strategy. Companies are now seeking to reduce dependence on a single country or trade corridor; and reconsidering where production, storage and distribution take place.
This can mean relocating some operations closer to key markets, establishing additional facilities in politically aligned countries, or creating alternative sites that provide options if an existing location becomes difficult to access. And, this has direct consequences for property strategy. A business might accept higher occupancy costs in a second location if by doing so they reduce dependency on a singular manufacturing base.
In this geopolitical environment, the cheapest location is not necessarily the most valuable. Flexibility and the ability to maintain operations during disruption, well that becomes a part of the calculation.
A new set of questions
This does not mean corporate real estate directors are expected to become geopolitical analysts, however. Rather, their role is likely to involve closer collaboration with risk, legal, procurement, security and supply-chain teams.
Thus, a location assessment may need to consider questions that would once have sat outside the property brief. Could sanctions affect the landlord, investor, contractor or business partner? Is the site dependant on infrastructure or a supplier exposed to cross-border restrictions? Could changes in foreign investment rules affect ownership or expansion? These factors can also influence lease negotiations and investment decisions. Shorter commitments, break options and more flexible property arrangements may become more attractive, especially where the long-term outlook is uncertain. Contrastingly, businesses may be willing to make substantial commitments in locations considered more politically dependable.
For CRE leaders, this means thinking about the portfolio as part of wider operating model and in a larger context. The next generation of location strategies may therefore be judged on how much room they give to manoeuvre when the world changes.
