With the recent US election now concluded, and leaders across the world seeking clarity on the international and regional implications of the new administration, it was timely that ULI & PwC published the 22nd Emerging Trends in Real Estate® Europe 2025 report on the eve of the election results.

This year’s report on European real estate investment and development trends, finance, capital markets, cities, property sectors and other issues, indicates that even before the results of the US election were known, there was increasing concern over growing geopolitical uncertainty, with 85% of respondents citing political instability, an increase of over 10 percent on last year, with the conflicts in Europe and the Middle East also mentioned as sources of considerable volatility.

European and global economic growth are identified as among the chief business concerns for 2025, with 77% and 62% respectively either “very” or “somewhat concerned” about these factors, and as well as fears about economic growth, some believe that recovery could take longer than previously predicted.

However, despite these factors, the survey also shows a degree of cautious optimism among the industry, with over 80% of leaders expecting both business confidence and profits to either remain the same or to rise in 2025.

With recognition that European real estate sentiment is still influenced by interest rate policies in the US as well as at home, one absolute certainty looking ahead is that the world will be watching Washington DC on 20 January 2025, and the start of an historic four-year term.

Based on the views of 1,214 industry leaders, this year’s Emerging Trends report offers a detailed snapshot of European real estate sentiment for the year ahead. From among the many detailed findings, here are five additional key takeaways from the report:

In addition to geopolitical and economic uncertainties, top industry concerns include the impact of increased regulation, which at 74% percent ranks as the top real estate investment and development concern in EMEA, and construction costs and resource availability the number two concern, at 70%.

Short and long term, ESG remains one of the most significant challenges for real estate, with more than 70% of respondents concerned about environmental issues next year, and 72% flagging this as an issue for the next five years. Many are struggling to keep competing environmental concerns at the top of the agenda, and interviews reveal a degree of industry ‘push back’ over ESG, amid other pressing concerns such as changing occupier/customer demands and corporate profitability.

Madrid’s ascendancy to second place for investor sentiment among European cities highlights the appeal of strong macroeconomic factors and quality of life. Meanwhile, London and Paris continue to dominate, with the UK capital retaining the top position for a fourth consecutive year and despite slipping to third place, Paris remains a strong market boosted by Olympic-driven investment and major infrastructure projects being planned.

Data centres ranked first in the overall investment and development prospects for European real estate, followed by new energy infrastructure, student housing and logistics. This reflects investors continuing to focus on major trends including demographics, digitalisation and decarbonisation, and a real estate industry looking to chart new horizons, despite lack of suitable stock in many sectors including logistics, storage and various forms of housing, and concerns that prices are inflated by over-optimistic growth assumptions.

Digital risks were among the top business concerns, including cybersecurity which ranked fourth overall at 59%, along with digital transformation (42%) and artificial intelligence (35%). Nevertheless, nearly half of respondents had also used AI in the past year, and the majority expect that and machine learning to have an impact on all areas of real estate in the next five years.

Read the full Emerging Trends in Real Estate® Europe 2025 report, which includes hundreds of other industry insights. Download the full report from ULI Knowledge Finder.

Continue the discussion! Join us for further discussion on the 2025 Emerging Trends in Real Estate® Europe report. Several regional events are planned across Europe in the coming weeks and early 2025. Visit our events page for more information.