CBRE survey: Living sector top target for European investors
The Living sector has overtaken Logistics and has become the top target for European cross-border real estate investment for the first time, according to CBRE’s 2025 European Investor Intentions Survey.
Survey responses also indicate optimism across the board, with 71% of respondents expecting the market to recover by the end of 2025. Plans to deploy capital mirror this view, with 92% of investors intending to maintain or increase their buying activity in 2025.
“Our survey tells us that there is a marked difference in sentiment from last year, with increased deal flow expected in 2025,” said Tasos Vezyridis, head of thought leadership for Europe, CBRE. “Despite continued disparity in buyer and seller expectations, there is a growing desire to both buy and sell. This, coupled with debt maturities and equity rotation expected, should lead to more product coming to market. As a result, these expectations should start to converge.”
Living was selected as the preferred European real estate sector, driven by ongoing increased demand across the region. According to the survey, 32% of respondents said living was their top target, followed by logistics at 27% and offices at 16%.
Of those investors planning to target living assets, almost two-thirds selected build-to-rent due to the subsector’s strong long-term fundamentals. Investors targeting the office sector are interested in Grade A offices in prime locations, while logistics investors want modern facilities in major European cities.
A large proportion of investors also plan to pursue alternative investment strategies in 2025, with half of these respondents preferring student living. The rapid growth of AI-driven demand has propelled data centres into second place at 36%, overtaking senior living, which now sits in third place at 30%.
CBRE research also shows that European investors expect the UK to offer the highest returns for the third year in a row. Spain followed, improving from fourth in 2024, with Poland retaining third place. Germany and Sweden completed the top five European investment destinations.
At a city level, London is the most attractive for cross-border investment, a position it has held since 2021, followed by Madrid, Paris, Barcelona and Warsaw.
“London offers a lot to prospective investors so it’s no surprise that it retains the top spot in our survey,” said Chris Brett, head of capital markets Europe, CBRE. “However, competition is fierce and a number of countries across Europe have committed to future proofing their economies, notably Spain. This, alongside advanced legislation and solid financial infrastructure, has seen Spain rise in prominence with investors looking to deploy capital in Europe, with Madrid and Barcelona key focal points.”
Investors increasingly look at sustainability as a means of combining resilience and value creation, with less than 5% of respondents stating that they do not factor sustainability into their 2025 investment plans. When asked which sustainability strategies they plan to implement, 64% of respondents look to retrofit existing buildings, as this provides a good opportunity to enhance returns while meeting the necessary sustainability standards.