Europe’s real estate sector is showing strong signs of recovery after years of subdued activity. Investment volumes rose by 25% over the past year, according to new research from commercial property group CBRE.
In the first quarter of 2025, investment in European real estate grew 6% year-on-year to 45 billion euros ($51 billion). Over the full year, total investment volumes reached 213 billion euros, supported by improving economic sentiment and falling interest rates.
Growth was broad across different sectors. Living assets, including multi-family dwellings and student housing, led the way with a 43% annual increase. CBRE had previously highlighted this segment as a key target for cross-border investors in its 2025 European Investor Intentions Survey.
Retail investment also posted strong gains, rising 31% over the past 12 months. In the first quarter alone, retail assets recorded a 26% increase in investment, more than any other sector.
Hotels, industrial and logistics properties, and offices also saw healthy inflows, up 23%, 19%, and 16% respectively over the year. Healthcare was the only sector where investment volumes declined.
The findings align with recent data from U.K. property firm Rightmove, which reported a rebound in first-quarter investments in Britain’s office, industrial, and retail sectors.
The recovery comes after the European Central Bank and the Bank of England cut interest rates in 2024, boosting growth prospects across major European markets.
However, CBRE warned that recent global economic challenges could dampen future investment. A new U.S. tariff regime has weakened economic sentiment worldwide.
“2025 has started strongly, with retail, living, and office assets attracting solid investor interest,” said Chris Brett, head of Capital Markets for Europe at CBRE. “But we are aware of the rapidly changing macroeconomic environment and expect buyers and sellers to take a more cautious approach due to market volatility.”
Adding to the uncertainty, the International Monetary Fund last week lowered its 2025 global growth forecast to 2.8%, down 0.5 percentage points from its earlier estimate. The IMF also cut its growth outlook for the eurozone to 0.8% from a previous forecast of 1%, citing U.S. tariffs as a “major negative shock to growth.”
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