Emerging Trends in Real Estate® Europe 2024

Report Summary: Europe’s real estate leaders are slowly coming to terms with a market burdened by inflationary pressures and high interest rates while addressing the ever-growing commitments around environmental, social and governance (ESG) issues. Meanwhile, central bank interest rate increases in 2022 and 2023 have left large sections of the industry forsaking dynamic strategies for a more passive monitoring of policies that affect the price of debt, valuations, construction costs and distress risk. A wedge continues to be driven between market prices and valuations. One acknowledged consequence has been record-low investment volumes. But the relative risk-adjusted return outlook in a higher-for-longer interest rate environment is also raising questions about real estate’s status as a favoured asset class. Though the survey indicates greater business confidence and profits for 2024 than a year ago, this is from a low base and is still well below the optimism of previous years. The industry is paying close attention to economic forecasts for Europe that suggest sluggish growth at best.