Savills: recovery in European market, volumes up 15% in Q3
The market recovery in Europe’s real estate market is picking up pace, helped by improved sentiment following recent interest rate cuts, according to the latest research by Savills that was presented at the first day of EXPO Real fair in Munich yesterday.
European real estate investment volumes are forecast to reach approximately €37.1 billion in Q3 2024, a 15% increase on Q3 2023 figures, Savills says, which would bring total investment volumes for the year to date to €113.3 billion, which represents a 5% rise on last year.
While volumes are still below the five-year average, certain regions are recovering more rapidly than others. Southern Europe and Central and Eastern Europe have shown particular resilience. In Southern Europe, investment volumes are expected to be up 11% year-on-year, while CEE volumes have risen 16% year-on-year.
Among the core markets – the UK, Germany and France – the UK is in the strongest position and investment volumes are rebounding strongly with a 26% year-on-year increase.
“The European real estate market is showing signs of increasing activity, particularly since the return from the summer break”, said James Burke, Director, Global Cross Border Investment, Savills.
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”, said Burke.
Savills forecasts that by the end of 2024 investment volumes for Europe will reach around €170 billion, which would represent a 15% increase on the previous year.
This positive trend is expected to continue next year: the research finds that full year figures for 2025 could potentially reach €219 billion, which would represent 29% year-on-year growth.
When it comes to yields “across Europe they are expected to remain stable over the next six months, with compression likely for logistics assets and, to a lesser extent, retail parks”, said Lydia Brissy, Director of European Research, Savills. “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.”