Savills survey: Spain the most popular country to invest in
Spain has become the most popular country to invest in, according to a new survey conducted by Savills among forty cross-border real estate investors with total AUM of over €800 billion, followed by the UK, France, the Netherlands and Germany.
Over half of respondents are expecting to increase their asset allocation to Europe and Middle Eastern real estate in 2025, up from 35% in 2024. Southern Europe is seen most favourably by investors and Spain is in first place followed by the UK, France, the Netherlands and Germany. All these countries’ appeal has increased year-on-year.
As for sectors, “beds and sheds remain most in favour among investors, but this year’s survey demonstrates a material uptick in interest for CBD offices, hotels, data centres and various retail sectors,” said James Burke, director, global cross border investment, Savills. “This reflects a combination of repricing feeding through into the market, robust long-term occupational fundamentals and the return of accretive returns in certain sub-sectors, particularly in the Eurozone.”
There is still some caution in the market, and assets in the €20 million to €60 million lot size remain the most popular among investors. However, as interest rates fall further, Savills expects the number of larger transactions to increase towards the end of 2025.
“In this year’s survey, there has also been a higher proportion of investors looking to increase their risk appetite, rising from 28% to 45% year-on-year,” said Mike Barnes, associate director, European research, Savills. “In a similar vein, more investors are willing to undertake a ‘manage to ESG’ strategy compared to 2024.”
This can partially be explained by the significant reduction in Europe’s development pipeline and strong competition for best-in-class assets, as a result of which more and more investors are looking to move up the risk curve in order to achieve their return targets, Barnes said.