European real estate investment volumes are on track to reach approximately €37.1 billion in the third quarter of 2024, representing a 15% increase compared to the same period last year, according to the latest report from property consultancy Savills.
As of now, total investment activity for the year has hit €113.3 billion, marking a 5% rise from 2023 figures. However, despite the upward trend, investment remains below the five-year average, indicating room for further growth.
Looking ahead, Savills projects that European real estate investment volumes for the full year 2024 will reach around €170 billion—representing a 15% boost compared to 2023. Moreover, the outlook for 2025 is even more optimistic, with forecasts suggesting volumes could hit €219 billion.
The regional breakdown shows that Southern Europe is expected to see an 11% year-on-year increase in investment, while Central and Eastern Europe are set for a stronger rise of 16% compared to last year.
The UK, in particular, is demonstrating strong momentum, with investment activity soaring by 26% year-on-year, a sign of renewed confidence in the market.
Key Drivers of the Recovery
James Burke, director of global cross-border investment at Savills, pointed to key factors behind the recent uptick in activity. “The European real estate market has gained considerable momentum, especially after the summer. A major turning point came on 12 September, when the European Central Bank implemented its second interest rate cut, boosting market sentiment throughout the Eurozone. Since then, investor interest has been climbing, driven by improving pricing conditions and more assets coming to market,” Burke explained.
Outlook for Yields
Lydia Brissy, director of European research at Savills, also commented on the outlook for yields across various asset classes. “Yields are expected to remain stable across Europe over the next six months, with potential yield compression for logistics assets and, to a lesser degree, retail parks. However, shopping centre yields may experience a slight increase. By March 2025, we expect prime yield hardening to extend across different asset types throughout Europe,” Brissy noted.
With improving conditions and growing investor interest, Europe’s real estate sector appears poised for continued recovery and growth well into 2025.
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