A new report from CBRE says that investors around the continent have a ‘markedly more optimistic’ outlook than they have had in recent years.
The report, the European Investor Intentions Survey 2025, said a quarter of respondents believe a recovery has begun, with three-quarters predicting that the investment market will rebound by the end of the year. More than nine in 10, said CBRE, think their purchasing activity will increase or remain the same, with more than 75% saying their selling activity will do the same.
The firm wrote in an accompanying statement: “For the first time, our survey captures insights from both General Partners (GPs) and Limited Partners (LPs), covering the entire spectrum of equity. Significant differences emerged in their strategy and sector preferences. Most LPs (81%) are pursuing either core or core plus strategies, while 56% of GPs are targeting value-add and opportunistic investments.”
It added: “In terms of sectors, LPs were even more pronounced in their preference for Living (47%), while GPs were almost equally divided between Living and Logistics. Surprisingly, while Logistics (21%) was also ranked second among LPs, this second place was shared with Office (21%), showing that LPs retain appetite for the sector.”
Of the European capitals, CBRE said that London was seen as the market with the strongest expected total property returns this year, a development that was driven by strong interest in London. This was followed by Spain, although Germany and Italy fell in the rankings.
CBRE also said that sustainability remains a key consideration when it comes to investment decisions.
It added: “The preferred approach for achieving sustainable investments continues to be through retrofitting existing buildings. Most investors revealed that they already have capital available to fund enhancements, indicating that sustainability is fully embedded in their capital raising or allocation strategies.”
Interestingly, CBRE said the premium investors are willing to pay in 2025 has increased slightly compared to the year prior. 83% of respondents are willing to pay a premium of 6% or more versus 76% a year ago. While only 13% of investors said they were willing to pay premiums, down from 18% the previous year, it said this decline may be attributed to respondents’ belief that sustainability standards have become the market norm.
Writing in the report, Ludovic Chambe, head of ESG and sustainability solutions for continental Europe, said: “The improvement of buildings to meet sustainability standards, especially in the office sector, offers a strong opportunity for enhancing returns. Retrofitted sustainable buildings are more desired by occupiers attracting workers back to the office and are less capital intensive.”
