In 2024, real estate investment in Europe consolidated its stability after two years of adjustments: volumes rebounded selectively, with activity concentrated in living (multifamily and residences), industrial/logistics, and hotels, while office assets continued along the recovery path from the complex period they had been dragging. Consultancy JLL confirmed in its report European Living Market Perspectives 2025 that living assets accounted for the largest share of investment, with 26%.
For 2025, experts anticipated a gradual recovery of investment based on expectations of improved access to financing and an increase in supply. It was also projected that the living segment would continue driving flows, with shortages in high-demand segments, and an increase in investment was forecast, with double-digit figures.
The first months of the year confirmed these forecasts, according to consultancy Savills in its report European Investment – Q2 2025. European real estate investment continued to show resilience in the first months of the year. In the second quarter of 2025, transaction volumes reached nearly €50 billion, representing an 8% year-on-year increase. This figure adds to the 13% increase recorded in the first quarter, raising total first-half investment to almost €95 billion, with a year-on-year increase of nearly 11%.
Although the beginning of the second quarter was marked by a significant slowdown in investment activity due to trade tensions with the United States, after President Donald Trump’s tariff agreements signs of recovery emerged, and activity gradually returned. Since then, several large transactions and portfolios have entered the market, helping to boost confidence. Among them, notable examples include Assura’s large healthcare portfolio in the UK, to be acquired in the third quarter by KKR and Stonepeak for £1.7 billion, as well as the Trocadero Center in Paris, to be sold by Union Investment for around €700 million.
Student Living in the Investor Spotlight
Among different asset types, purpose-built student accommodation (PBSA) is standing out across Europe. The sector continues to benefit from strong demand and investor interest.
Meanwhile, retail and hotel assets are exceeding initial expectations. Shopping centers and supermarkets have shown strong performance in countries such as Spain, the Netherlands, and Hungary. Hotels also continue to attract investor interest, supported by the rebound in tourism and long-term confidence in leisure travel. The attractiveness of logistics remains, though it is becoming increasingly selective. Central locations with long leases and high-quality tenants are preferred by capital. In the office segment, some notable deals and growing interest in value-add strategies indicate a timid reactivation, concentrated in central and strategic locations.
Outlook for Year-End 2025
The outlook for the European investment market in the second half of 2025 is positive within a framework of caution. Despite the geopolitical context and the contained results of the second quarter, most European countries expect a stronger second half with investment activity gradually recovering.
Savills points out that total investment volume could reach €222 billion by the end of the year, representing a 12% year-on-year increase.
Consolidation and Growth in the Southern Region
In Southern Europe—Italy, Spain, and Portugal—Cushman & Wakefield highlights their “resilience and strong capacity to attract capital.” In the first half of 2025, these markets recorded a transaction volume exceeding €12 billion, 30% more compared to the same period last year.
Hospitality and retail are the segments contributing most to this growth, driven by the dynamism of tourism and consumption. Projects aimed at repurposing obsolete-use buildings (especially offices) into hotels and residences are also experiencing special momentum.
The residential segment remains a key investment asset, while the logistics and industrial sectors show positive signs, though still constrained by supply limitations.
For Cushman & Wakefield, the improvement in financing conditions adds to these factors, showing that “Europe is going through a period of consolidation and growth, with a market that is increasingly mature, diversified, and oriented toward innovation in the use of space.”
