Early signals of a potential recovery in European commercial real estate were evident in the second quarter, but the pace and strength of the rebound will vary from market to market. Recent and upcoming elections throughout the continent and globally, and uncertainty over the timing and extent of possible interest rate cuts, are contributing to a generally cautious outlook. Until stability is more assured, many investors will remain hesitant to deploy significant amounts of capital.

Key Highlights

• Resurgence is most evident in markets with a strong domestic capital base, including Eastern Europe, the Nordics and Spain.
• The UK election has sparked more interest from international investors, especially from Asia.
• Hotel assets remain strong, for both leisure and business-focused properties. We expect this asset class to continue to grow this year and beyond.
• There is more focus on student housing as a growth opportunity, in the form of development or investment.
• Life science assets also saw an uptick in Q2, with investors looking to raise capital to build ‘wet labs’. The UK’s ‘Golden Triangle’ is one of the preferred destinations for such investment.

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