Italy
Portugal
According to the quarterly analysis by Dils Research, in 2024, investment activity across European markets experienced a notable rebound, with capital flows into commercial real estate rising by 18% compared to the previous year.
This marked a clear step in the ongoing recovery process. The final quarter of the year was particularly strong, posting a 30% year-on-year increase, reinforcing optimism heading into 2025.
Italy stood out as the best-performing market in terms of growth, with investment volumes returning to their 10-year average of nearly €10 billion – an impressive 60% surge from 2023. In contrast, Spain recorded only a modest 1% increase, though it’s important to note that its market proved higher resilience in the previous year. Meanwhile, France and Germany, both heavily impacted by the 2023 investment downturn, showed partial recoveries, with volumes increasing by 10% and 24%, respectively. However, despite these gains, their total investments for 2024 remained just slightly above half of their 2022 performance.
The moderate growth seen in 2024 was primarily driven by improving financial conditions, particularly the gradual easing of interest rates in the second half of the year. Looking ahead, 2025 presents a cautiously optimistic outlook: the recent stabilization of yields has now been followed by the first signs of renewed compression, which could help stimulate investment activity. However, rising geopolitical uncertainties – exemplified by the potential introduction of tariffs in the USA – could disrupt trade flows and potentially trigger a resurgence of inflationary pressures, while GDP growth in Europe languishes.
In the fourth quarter, Logistics emerged as the most sought-after asset class, driving a 26% increase in annual investment compared to 2023 and securing its place as the second-largest sector by total volume. It trailed only the Living sector, which maintained strong momentum throughout the year, particularly in Germany and the UK. Hospitality and Retail also posted solid gains in investment activity, reflecting renewed confidence in these segments. Meanwhile, the Office sector continued to struggle, weighed down by weak volumes in the first quarter. Only Italy (+92%) and Portugal (+50%) managed to buck the trend and record annual growth in office investments.
Office occupier activity displayed growing dynamism in most of the monitored cities. Lisbon registered the best performance in terms of take-up increase (+80% on 2023), followed by Porto (+40% on 2023) and Munich (+30% on 2023). Rental growth was notable in several office markets, with the highest year-on-year increases observed in London (+11%) and Paris (+10%).
After the sharp decline in take-up volumes seen in 2023, the logistics market found more stability in 2024. However, this overall equilibrium masks contrasting regional trends: Germany and the UK experienced another significant drop-in occupier activity, while the Netherlands rebounded strongly. Southern European markets have shown greater resilience amid sector challenges: Spain, Italy, and Portugal, in particular, recorded take-up volumes above or near their recent peak levels, reinforcing their relative strength in the current market cycle.
In the first nine months of 2024, the European residential market began to feel the effects of the interest rate cuts on mortgages. In all monitored countries, the decline in the number of recorded transactions slew down compared to the previous year, while average prices, supported by limited availability in the main markets, fluctuated slightly as they await a more pronounced rebound.
