The European real estate market is in the midst of a remarkable rebound, following a multiyear period of lackluster investment activity. Recent reports from CBRE, a leading commercial property group, indicate that investment volumes in this sector have surged by 25% over the past year, reaching a total of 213 billion euros. This positive trajectory is a sign of an overall bettering environment for the European real estate market as we enter into 2024.
Meanwhile, investment in European real estate jumped by 6% year-over-year in the first quarter of 2025. This final step made a huge sum total of 45 billion euros—about $51 billion. Such growth is remarkable against a backdrop of unprecedented changes in monetary policy. Indeed, both the European Central Bank and the Bank of England have already moved to lower interest rates. These cuts have improved competitiveness in core markets within the sector.
CBRE’s 2025 European Investor Intentions Survey illustrates the underlying € resilience of European real estate. That means this sector is one of the best targets for cross-border investment. In this sense, living assets have certainly led the way. Student and other kinds of multiple dwellings recorded the biggest one-year gain of 43%. Retail investment has the potential to be the most impactful. It has increased by 31% annually and within just the first quarter of 2025, increased a staggering 26%.
Chris Brett, CBRE’s head of Capital Markets for Europe, insisted that 2025 has started the year with a bang. He added that retail, living, and office assets are the hottest commodities in investors’ eyes at the moment. This optimism comes with caution, though, as Brett pointed out the risks of global economic swings could have severe consequences.
CBRE has voiced its worries about the recent turn toward negative sentiment on a global scale. They pointedly underscored how a potential new U.S. tariff regime would make investment in the European market less attractive, even with those promising numbers. Brett further recognized the rapidly evolving macroeconomic environment. He does expect sellers and buyers to tone down expectations as the market continues to be volatile.
The European real estate sector, on the whole, are taking these challenges in their stride. Analysts predict increasing investment volumes through 2025, provided macroeconomic conditions stabilize. Yet challenges remain in the ever-changing landscape of real estate. There are significant growth opportunities on the horizon.