Europe’s real estate market is finishing 2025 on a strong upswing. New research from Savills shows investment volumes are expected to reach around €77 billion in the final quarter of the year, marking a 12% increase compared to the same period in 2024. That puts total investment for 2025 at roughly €215 billion, up 9% year-on-year and signaling a clear return of confidence after a cautious period
Growth isn’t limited to just one or two countries. Markets such as the Czech Republic, Finland, Portugal, Denmark, Belgium, Spain, Sweden, Hungary, and Norway are all forecast to see investment volumes jump by at least 20%, highlighting how broad-based the recovery has become across Europe.
Where Investors Are Placing Their Bets for 2026
Savills points to three main strategies shaping investor behavior going into 2026.
Core and Core+ assets remain the foundation. High-quality offices in central business districts continue to attract capital thanks to low vacancy rates and strong tenants, particularly as companies prioritize top-tier buildings. Hotels are also proving resilient, especially in year-round tourist destinations like France, the UK (with London leading), Italy, Spain, Portugal, and Greece. Residential assets in major cities remain in demand as chronic housing shortages support stable, long-term income. Prime retail streets are also holding up well, benefiting from tourism and improving occupancy as retail sales stabilize across Europe.
Value-add opportunities are drawing interest from investors willing to roll up their sleeves. Older office buildings in well-connected locations are being upgraded to meet stricter ESG standards, creating clear upside. Logistics and light industrial assets—especially those tied to last-mile delivery—remain attractive, while retail parks and shopping centers with layout or operational issues are being reworked into more efficient or mixed-use spaces. Investors are also increasingly exploring niche sectors like self-storage, cold storage, dark kitchens, EV charging, and open-air storage, which offer higher yields and more resilient income streams.
Opportunistic strategies focus on transformation. Outdated office buildings in good locations are being repositioned or redeveloped as prime space remains scarce. Conversions, particularly from commercial to residential use, are a major theme in cities struggling with long-term housing shortages.
Global Capital Is Returning
Cross-border investment continues to play a major role, accounting for roughly 45% of total market activity. European investors—especially from the UK, France, and Sweden—are expanding beyond their home markets, a trend expected to carry into the new year. Interest from Middle Eastern investors is also picking up again, while North American buyers remain active on both sides of transactions.
Looking Ahead
Savills expects European real estate investment volumes to grow by around 18% in 2026 as pricing stabilizes, economic conditions improve, and institutional capital flows back into the market. Offices are set to regain momentum as investors grow more confident in prime assets, while residential and living sectors are likely to remain standout performers.
After a period of hesitation, Europe’s property market is clearly warming up again—and for investors, the next phase of opportunity is already taking shape.
