Mipim: income growth and selective opportunities to drive European real estate recovery

European real estate markets remain shaped by economic uncertainty and slow transaction activity, but strong occupier demand and structural supply shortages continue to support investment prospects, industry leaders said during Real Asset Media’s session “Real Estate Trends: Driving Capital & Investment” on Wednesday at Mipim.

Speaking at the Insight Stage in the International Investors’ Lounge, panellists said investors are navigating volatile macroeconomic conditions while focusing increasingly on income growth and asset-specific opportunities. The session was moderated by Real Asset Media’s group publisher, Richard Betts.

Petra Blazkova, head of research and strategy at Catella, said the current macroeconomic backdrop has become increasingly unpredictable.

“Extreme levels of uncertainty is probably a very short way how I would summarise it. You see this week how quickly the oil prices are volatile —80 to 120 US dollars per barrel. So, it’s just a signal to us that the volatility and uncertainty is there in the economic space.”

She said the economic narrative had shifted rapidly in recent months. “It’s uneven, it’s fragmented and it’s quite uncertain. Unfortunately, we were coming to it with a slightly different narrative and I would say that it has changed quite quickly for us.”

Blazkova said investor sentiment remains cautious, with market participants moving slowly and taking a more risk-averse approach in the current conditions.

Despite the uncertain environment, occupier markets across Europe continue to show resilience. David Inskip, EMEA head of research at CBRE Investment Management, said rental growth across commercial sectors has remained relatively strong.

“In Europe, if you think about the indices of prime rents right across the commercial sectors, growing at about 6% year-on-year. And that’s been the case now for about 18 months. Much well ahead of what we’ve seen in other regions of the world. So, the occupier side doing a good job of driving performance overall and actually a bit of a differentiator for Europe when it comes to comparing to the other regions.”

Investment markets remain slow but are gradually recovering after the downturn earlier in the cycle. Blazkova said activity has begun to improve following a particularly weak period. “I think the weakest year was 2023. And since, there is a slight and gradual recovery in terms of how many assets are being traded, how big the deals are. So, there is a slight improvement taking place.”

She cautioned that the recovery remains gradual. “But it’s very, very slow… but there is a positive upside to it, for sure.”

Technology and transaction data are also highlighting how market conditions have changed. Alexandre Grellier, chief executive officer of Drooms, said data shows that deal timelines lengthened significantly during the market slowdown.

“What we figured out is that the duration of a deal is taking more and more time. It’s taking longer and longer. We had an absolute peak last year with more than 368 days in average.”

However, he said recent data suggests the trend may now be stabilising.

“But what we saw now in 2025 is that this increase of time has stopped. So we are seeing a very, very slight decrease, maybe a little glimpse of hope at the horizon.”

Looking ahead, Inskip said investors will increasingly need to focus on local supply-demand dynamics rather than broad sector allocations. “There’s a real need to be really, really granular in the way that we think about markets.”

He added that sentiment toward some European markets could improve within the next year. “I think Germany will be firmly back on the radar at 12 months.”