Shared 18 July, 2025
According to Savills latest research, European real estate investment continued to show resilience in Q2 2025, with preliminary figures indicating transaction volumes of close to €50 billion, a 8% year-on-year increase.
Total investment volumes for the first half of the year are forecast to reach c.€95 billion, up by almost 11% compared to H1 2024.
The start of the second quarter saw a noticeable slowdown in investment activity in several European countries as investors adopted a wait-and-see attitude in the run up to and during the US’s “Liberation Day”. This temporary caution delayed decisions and held back volumes. However, signs of recovery emerged post-President Trump’s tariff announcements, with activity gradually returning to pre-Liberation Day levels. Several large deals and portfolios have since entered the market, helping to boost confidence.
Purpose-built student accommodation (PBSA) stands out as being a popular asset class across Europe. Several large portfolio deals are either in progress or nearing completion in France, Spain, Italy and the Baltics. PBSA continues to benefit from strong occupier demand and investor interest in the living sectors, although limited supply in some markets remains a hurdle.
Retail and hotels are outperforming earlier expectations. Shopping centres and grocery-anchored retail assets have, amongst others, shown solid performance in Spain, the Netherlands and Hungary. Hotels are also enjoying continued investor interest, supported by a rebound in tourism and long-term confidence in leisure travel. For both sectors, clearer post-pandemic trajectories have helped reignite investor interest.
James Burke, Director, Global Cross Border Investment at Savills, says: “The outlook for the European investment market in the second half of 2025 is cautiously positive. Despite ongoing geopolitical tensions, we anticipate a stronger second half of the year in most European countries. Encouraging signs include a growing number of sizeable assets and portfolios returning to the market, which appear to be attracting renewed interest from investors.”
Lydia Brissy, Director in Savills European commercial research team, says: “Our forecasts remain largely unchanged from last quarter, with total European investment volumes projected to reach €222 billion by year-end, a 12% year-on-year increase. Growth is expected to be driven primarily by markets such as the Czech Republic, Finland, Denmark, the Netherlands, and Belgium. This modest recovery will be underpinned by continued macroeconomic stabilisation, ongoing price adjustments, and the progressive return of core capital to mainstream sectors.”
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