EXECUTIVE SUMMARY
We are pleased to share our 2026 European House View, an annual publication that offers our outlook on the European economy and commercial real estate (CRE) market, including major trends and emerging opportunities; and outlines our highconviction themes and preferred investment strategies.
REPORT HIGHLIGHTS:
- Signals for 2026 point to an inflection point in the market, as easing financial conditions, shifting trade dynamics, and evolving geopolitical risks set the stage for the next wave of investment opportunities.
- Europe is emerging as a focal point in the global investment landscape, supported by more accommodative fiscal policies, declining interest rates, and growing confidence that real estate values have reached their trough. The recent correction has absorbed much of the downside risk, creating a solid foundation for recovery amid significant dry powder waiting to be deployed.
- European logistics markets experienced a short-term softening in tenant demand, yet strong structural drivers, including e-commerce growth, technological innovation, defence-related demand, and supply-chain regionalisation, combined with tightening new supply and persistent land and power constraints, position modern, well-located assets for sustained rental growth and long-term resilience.
- Data centres are transitioning from niche to mainstream, fuelled by structural growth in cloud computing and AI adoption. Demand is outpacing supply, constrained by power availability, reinforcing pricing power for developers with secured capacity. As digital infrastructure becomes central to Europe’s competitiveness, the sector offers durable, long-term opportunities for investors able to deliver mission-critical facilities in both primary hubs and fast-growing secondary markets.
- Real estate lending has evolved to become an important component of portfolio construction, offering durable income, capital preservation, and risk-adjusted returns that investors may find attractive in a market still working toward equilibrium. Regulatory changes are reducing traditional banks’ lending capacity, creating a structural funding gap that positions private lenders to play a critical role in the European market.
- Europe’s housing shortage is intensifying, driven by funding constraints, lengthy planning processes, and demographic shifts. Development viability challenges, regulatory delays, and cost inflation remain significant hurdles, favouring well-capitalised investors who can navigate complexity and deliver high-quality rental accommodation.
