Haussmann architecture buildings are reflected on the facade of Samaritaine department store in central Paris on October 10, 2023.
Dimitar Dilkoff | Afp | Getty Images
Europe’s real estate sector is recovering at pace following years of subdued activity, with investment volumes rising by a quarter over the past 12 months, according to new research from commercial property group CBRE.
Investment in European real estate rose 6% annually to 45 billion euros ($51 billion) in the first quarter of 2025 as improved macroeconomic sentiment and lower interest rates took hold. Investment volumes were up 25% annually over the year to 213 billion euros.
Inflows were broad-based across sectors, with living assets such as multiple dwellings and student housing leading the charge, up 43% over the year. The sector was previously identified as a top target for European cross-border real estate investment, according to CBRE’s 2025 European Investor Intentions Survey.
Retail investment followed close behind, rising 31% year-on-year over the past 12 months, and increasing 26% — more than any other sector — in the first quarter of 2025.
Hotels, industrial and logistics, and offices also saw increased annual inflows of 23%, 19% and 16% over the past year, respectively. Healthcare, meanwhile, was the only sector to record lower investment volumes over the period.
The data mirrors similar insights from U.K. real estate firm Rightmove, which earlier this month cited a resurgence in first-quarter investment volumes in Britain’s key office, industrial and retail sectors.
It comes as Europe’s real estate sector showed signs of improvement in 2024 after the European Central Bank and the Bank of England moved to cut interest rates, and growth prospects improved across various key markets.
Still, CBRE warned that a recent souring of global economic sentiment — led in part by the new U.S. tariff regime — could weigh on investment appetite going forward.
“2025 has got off to a solid start, with retail, living and office assets looking particularly attractive to investors,” Chris Brett, head of Capital Markets for Europe at CBRE said.
“However, we are cognizant of the rapidly changing macroeconomic environment and anticipate a more cautious approach from both sellers and buyers in response to market volatility.”
The IMF last week slashed its 2025 global growth forecast to 2.8%, down 0.5 percentage points from its previous estimate, citing U.S. tariffs as a “major negative shock to growth.” The financial body also lowered its growth outlook for the euro area this year to 0.8% from 1% previously.