The prospects for European real estate come under the spotlight in the first of three regional snapshots based on the findings of Emerging Trends in Real Estate Global Outlook 2005.

The top ten issues in Europe

Just what are the issues likely to influence the agendas of Europe’s real estate leaders during 2025? Regulation? Inflation? Cost of materials?

Certainly, all the above – to some degree.

However, presently, geopolitical tensions on the world’s stage could not be higher, with Ukraine and the Middle East foremost in mind. Clearly illustrating this, the most significant industry concerns for Europe according to Emerging Trends in Real Estate Global Outlook 2025 are international political instability (85 percent of respondents) and the further escalation of wars (83 percent).

Inevitably, geopolitical risk and political instability were also prominent talking points among speakers and delegates alike at the recent MIPIM international real estate market conference in Cannes, and events have continued to develop since the Outlook was published a few weeks ago.

In addition, for many investors responding to the survey (which was undertaken between July – September 2024), at third place sluggish economic growth (77 percent) also remains a significant concern, with genuine growth seen as still beyond reach by some.

The remaining top ten issues causing concern for European real estate are shown in the chart below:

Just outside of the top ten, but still charting quite highly among many, issues such as cybersecurity, inflation and social equity and inequality are still firmly on the agenda.

A more positive perspective?

Yet, conversely, overall sentiment concerning market prospects is becoming more positive in Europe.

Many think that inflation may finally have been tamed by the rate cutting programmes from central banks.

Meanwhile, transaction data for 2024 revealed an 11.6 percent increase in deal volumes year on year from 2023, supporting the notion that Europe overall is largely ‘on the right path’.

However, recovery isn’t consistent across the continent, with for example the UK and Southern Europe displaying clear improvements, but France and Germany still challenged, affected by political uncertainty and weaker growth.

Indeed, this year’s Outlook reveals a complex and rapidly evolving landscape for many of Europe’s nations.

Dealmaking and a return to growth

In terms of dealmaking, some believe that a greater alignment on pricing will support the market transactions overall, and sector preferences are likely to follow on from last year’s deal flows.

As an indication, offices accounted for 22 percent of transactions in 2024 – the most purchased sector – though conversely spending on corporate premises fell to their lowest levels since 2009 across Europe.

In contrast, ‘beds and sheds’ continued their upward trajectory, with the industrial, living and hospitality sectors seeing volumes surpassed year on year in 2024.

Finally, UK industrial led deal volumes and achieve 10 percent year on year price increases. The clear winner overall, and the sector is also perceived as important to aiding wider European recovery going forward.

Find out more

For further European insights, and the outlook for the Americas and APAC regions, click to download this year’s Emerging Trends in Real Estate® Global Outlook from ULI Knowledge Finder: