New research from Savills suggests that real estate investment volumes in Europe will rise 18% between Q1 2024 and Q2 2024.
The firm said volumes will reach €44.5bn, with a further projection to reach €74bn in the first half of the year. This, it said, will be in line with those of the same period last year.
At the same time, the firm calculates that the UK, Spain, Italy, Romania, the Czech Republic, Poland, Denmark, and Norway will all record a year-on-year increase in investment volumes for H1 2024.
Marcus Lemli, CEO of Savills Germany and head of investment for Europe, says: “The market seems to be bottoming out both in terms of activity levels and pricing. Sectors such as multifamily, hospitality, and logistics continue to see stronger investor interest.
See also: Q1 property investment volumes down but Savills still upbeat on 2024
He added: “Many investors operating internationally are seeking to take advantage of appealing pricing levels across different European jurisdictions. Consequently, we expect to see an increase in cross-border investment activity over the next six-to-12 months.”
This comes against a backdrop, Savills wrote elsewhere, in which investment activity may be starting to show signs of a gradual recovery.
Overall investment volumes, it said, should reach €74bn in the first half of the year, which will be 2% lower than they were at the same period in 2023. And across the whole year, Savills predicts that there will be a temporary stall in investment activity due to economic stagnation in Germany and the recent French election.
It wrote: “We anticipate the total European investment volume will likely range between €160–175bn by the close of 2024. This forecast reflects a resurgence in investment volume, poised to grow annually by 8–18%, surpassing the €148bn recorded in 2023.”
All of this contrasts falls in line with a recent article from investment firm KKR, which said that the market for European real estate was in one of its most-exciting periods in a quarter of a century.
Writing on the firm’s website, Guillaume Cassou, partner at KKR, and Seb D’Avanzo, managing director and head of real estate acquisitions at the same firm, said that the reasons for this excitement were material repricing, motivated sellers, strong fundamentals, and dislocated financing markets.
They wrote: “Real estate has repriced dramatically in the region, and a significant number of asset owners are coming under pressure to sell, with the highest quality, most liquid assets typically first on the list. In this environment, high-quality properties are often available at attractive valuations.”
Driving factors behind the boon, wrote Cassou and D’Avanzo are a combination of rising interest rates and macro uncertainty following Russia’s invasion of Ukraine. This, they write, has pushed prices to 20% to 40% lower than their peak values in 2021 and 2022. Despite this, fundamentals remain strong in many sectors.
