European Real Estate Investment Jumps 18% in Early 2024

Real estate investment in Europe has surged by 18% in the first half of 2024, reflecting a robust market recovery. This article delves into the factors contributing to this impressive growth, offering insights for potential investors.

In a recent report by the esteemed real estate consultancy Savills, it has been revealed that the volume of real estate investment across Europe has surged to approximately €44.5 billion in the second quarter of 2024. This impressive figure marks an 18% increase compared to the previous quarter, suggesting a robust recovery in the market. 

Interestingly, average returns have exhibited remarkable stability across all sectors for the first time in nine months, a development that may leave investors cautiously optimistic. Projections for the first half of 2024 indicate that investment volumes are expected to surpass €74 billion, aligning closely with figures from the same period in 2023. 

Certain markets are already outpacing these expectations; for instance, Spain has seen a notable uptick of 10%, with recorded investments reaching €5.66 billion, up from €5.15 billion during the corresponding timeframe last year. 

Savills further notes that the European market appears to be finding its footing, stabilizing in terms of both activity levels and pricing. Sectors such as multi-family housing, hotels, and logistics are particularly capturing the attention of investors, who are increasingly drawn to the attractive pricing available across various European regions. This trend is anticipated to spark a rise in cross-border investment activity over the next six to twelve months.

Moreover, as anticipated, real estate investment trusts (REITs) are gradually increasing their presence in the market, capitalizing on favorable valuations and the burgeoning appeal of more defensive asset classes. Institutional investors, too, are cautiously re-entering the fray as interest rates begin to decline. Meanwhile, those investors who do not rely on financing—such as sovereign wealth funds and private investors—continue to remain active participants in European middle-market transactions, further underscoring the dynamic nature of the current investment landscape.