United Kingdom, October 2024: According to recent research by Savills, European real estate investment volumes are expected to hit around €37.1 billion in Q3 2024, which will mark a 15% increase compared to the same period last year.

From the beginning of the year, the investment activity has reached €113.3 billion, showing a 5% increase from the previous year, despite being below the five-year average.

Savills predicts that by the end of the year, European investment volumes will reach approximately €170 billion, which is a 15% rise from 2023, with 2025 expected to hit €219 billion.

In Southern Europe, investment volumes are expected to grow by 11% over the year in 2024, while Central and Eastern Europe are expected to see a 16% increase.

The UK market is showing a strong recovery, with investment activity up by 26%.

James Burke, the director of global cross-border investment at Savills, stated: “The European real estate market is showing signs of increasing activity, particularly since the return from the summer break. A key boost came on 12 September, when the European Central Bank decided to cut interest rates for a second time, which positively impacted market sentiment across the Eurozone. Since then, investor interest has been growing, supported by improving pricing conditions and an increasing number of assets coming to market.”

Lydia Brissy, who leads European research at Savills, also mentioned: “Across Europe, yields are expected to remain stable over the next six months, with compression likely for logistics assets and, to a lesser extent, retail parks. Shopping centre yields may continue to increase slightly. From March next year, the hardening of prime yields should begin to spread across asset classes throughout Europe.”

Overall, the European real estate market is very likely to grow quite impressively, with investment volumes expected to hit an end figure in 2024 and 2025. Having come off of interest rate cuts, the European Central Bank has aided the market mood, after which investor interest and activity began to gather momentum. As yields continue stable and prime yields start to harden across asset classes, the market is in for a dynamic period of growth and opportunity.