Haussmann Architecture Buildings is reflected on the facade of the Samarite Department Store in central Paris on October 10, 2023.
Dimital Dilkov | AFP | Getty Images
According to a new study from the commercial real estate group CBRE, the European real estate sector has recovered at a pace following years of restrained activity, with investment volumes rising quarterly over the past 12 months.
European real estate investments rose 6% annually in the first quarter of 2025, rising to 45 billion euros ($51 billion) as macroeconomic sentiment improved and low interest rates remained in place. Investment volume increased 25% per year to 213 billion euros.
Influx was a broad base across sectors, with live assets such as multiple housing and student housing leading the fees, increasing by 43% per year. CBRE’s 2025 European Investor Intention Survey found that the sector was previously identified as the biggest target for cross-border real estate investment in Europe.
Retail investments rose 31% year-on-year over the past 12 months, up 26% in the first quarter of 2025, up 26% over any other sector.
Hotels, industry, logistics and offices have seen an annual inflow of 23%, 19% and 16% over the past year, respectively. Healthcare, meanwhile, was the only sector that recorded lower investment volumes over that period.
The data reflects similar insights from UK real estate companies rightmovecited a return to first quarter investment volumes for the UK’s major office, industry and retail sectors earlier this month.
It comes as the European real estate sector showed signs of improvement after the European Central Bank and the Bank of England moved to cut interest rates in 2024, and growth outlook improved in various key markets.
Still, CBRE warned that the recent sourness of global economic sentiment (in part led by the new US tariff regime) could weigh the desire for future investment.
“2025 has gotten off to a solid start as retail, living and office assets look particularly attractive to investors,” said Chris Brett, CBRE’s European capital markets head.
“However, we are aware of the rapidly changing macroeconomic environment and anticipate a more cautious approach from both sellers and buyers in response to market volatility.”
Last week, the IMF cut its 2025 global growth forecast to 2.8%, down 0.5 percentage points from previous estimates, citing US tariffs as “a major negative shock to growth.” Financial institutions also reduced their growth outlook for the Euro area this year to 0.8% from the previous 1%.
