Credit: Adobe StockMarket Radar Europe: Deployment in CRE amid struggles with green transition
The latest developments in the European real estate market this week
October 10, 2025Real Estate
Written by Helen Richards
This week in European real estate was characterised by major capital deployment in key commercial real estate (CRE) growth sectors.
Global private equity giant Blackstone is set to acquire a massive EUR 2.3 billion French industrial portfolio from Proudreed, marking one of the largest European industrial deals of the year and underscoring continued institutional appetite for the resilient logistics sector.
Meanwhile, in the reviving retail sector, Redevco kickstarted its pan-European retail parks strategy with a significant EUR 500 million commitment from CBRE IM. This move signals renewed investor confidence in the future of the retail park format.
Reflecting a broader industry trend toward alternatives, Royal London launched a healthcare-focused private REIT, tapping into the demographic-driven demand for medical and care-related real estate in the UK.
Overall, the report presents guarded optimism among CRE industry market players, citing capital availability and the cost of capital as top concerns.
Recent CRE lending data reveals the increased importance of non-bank lenders in Europe, who have become a durable component of the debt ecosystem. These alternative financiers are instrumental in providing development, transitional, and whole loan finance, often stepping in where traditional banks have retreated.
Financing activity is also centering on ESG-aligned investment, demonstrated by Aviva Investors who have issued a GBP 37 million green loan to finance a London office redevelopment. This transaction highlights the growing mandate for lenders to prioritise sustainable assets and the increasing use of green debt products.
Experts warn that financial incentives, such as green loans, are too limited (with modest discounts typically ranging from 0.1 to 0.3 percentage points) to justify the massive capital expenditure required for large-scale retrofitting and decarbonisation efforts.
This, combined with unclear and fluctuating regulation regarding energy performance certificate (EPC) rating deadlines, is causing landlords to delay expensive upgrades.
Look out for a new edition of the GRI Institute's Market Radar Europe next week!
This week in European real estate was characterised by major capital deployment in key commercial real estate (CRE) growth sectors.
Global private equity giant Blackstone is set to acquire a massive EUR 2.3 billion French industrial portfolio from Proudreed, marking one of the largest European industrial deals of the year and underscoring continued institutional appetite for the resilient logistics sector.
Meanwhile, in the reviving retail sector, Redevco kickstarted its pan-European retail parks strategy with a significant EUR 500 million commitment from CBRE IM. This move signals renewed investor confidence in the future of the retail park format.
Reflecting a broader industry trend toward alternatives, Royal London launched a healthcare-focused private REIT, tapping into the demographic-driven demand for medical and care-related real estate in the UK.
CRE Investment and Financing Outlook
Investment focus is expected to remain strong in these alternative sectors, as well as digital economy assets, logistics, and grocery-anchored retail, according to Deloitte’s 2026 Commercial Real Estate Outlook.Overall, the report presents guarded optimism among CRE industry market players, citing capital availability and the cost of capital as top concerns.
Recent CRE lending data reveals the increased importance of non-bank lenders in Europe, who have become a durable component of the debt ecosystem. These alternative financiers are instrumental in providing development, transitional, and whole loan finance, often stepping in where traditional banks have retreated.
Financing activity is also centering on ESG-aligned investment, demonstrated by Aviva Investors who have issued a GBP 37 million green loan to finance a London office redevelopment. This transaction highlights the growing mandate for lenders to prioritise sustainable assets and the increasing use of green debt products.
UK and Europe struggle to keep pace with green transition
Despite this growth in green finance, the UK and European property sector is reported to be struggling to keep pace with the necessary environmental transition.Experts warn that financial incentives, such as green loans, are too limited (with modest discounts typically ranging from 0.1 to 0.3 percentage points) to justify the massive capital expenditure required for large-scale retrofitting and decarbonisation efforts.
This, combined with unclear and fluctuating regulation regarding energy performance certificate (EPC) rating deadlines, is causing landlords to delay expensive upgrades.
Look out for a new edition of the GRI Institute's Market Radar Europe next week!