Executive Summary
We are pleased to present our 2025 European House View. This publication is produced each year and serves two essential purposes. First, it highlights our outlook for the European economy and the commercial real estate (CRE) sector as well as significant trends and opportunities. Secondly, it presents our key conviction themes and preferred investment strategies.
REPORT HIGHLIGHTS
- The eurozone economy has entered a better phase with economic recovery, low unemployment, and more moderate inflation. We expect the nascent recovery to continue over the next 12 months – albeit growth is likely to remain modest and uneven.
- CRE investment transactions appear to be finding a floor after a period of decline with market participants optimistic about recovery. We believe values in favored sectors such as logistics and residential are stabilizing and will bring greater convergence in buyers’ and sellers’ price expectations.
- Occupier markets remain resilient, with growing polarization between best-in-class assets and the rest of the market. Reduced supply in logistics and housing driven by lower development activity will lead to increased demand for modern space. We also expect significant demand for data centers driven by the ever-growing need for data storage, computing power, and networking.
- Regulatory measures following the Global Financial Crisis, compounded by recent economic volatility, have significantly constrained traditional sources of CRE debt capital and in our view, is presenting a strategic opportunity for debt funds to leverage market dynamics and address capital shortfalls.
