Credit: Adobe StockMarket Radar Europe: Is the European CRE market at a turning point?
The latest developments in the European real estate market this week
September 25, 2025Real Estate
Written by:Helen Richards
Optimism is on the rise in the European commercial real estate (CRE) market as it heads into the final quarter of the year. Despite economic uncertainty across the Atlantic, Europe's economic resilience shown in 2025 is expected to strengthen further in 2026 and 2027, creating a more stable environment for the real estate industry.
This stability, coupled with strong demand and a slowdown in new construction, suggests that the market may be on the verge of a new expansionary cycle.
Investor confidence is growing, with the recent GRI Barometer revealing that 73% of industry players are currently investing or expanding their businesses. This indicates a resilient and strategic approach, where decision-makers are moving forward with projects while actively managing risks.
Key investment hubs emerge across Europe
Southern Europe is particularly attractive to investors right now. The GRI Barometer ranked Madrid as the most promising city for real estate investment, with Lisbon tying for second place with London.
This sentiment is backed by a growing presence of major real estate firms in the Spanish capital, including DWS as they expand their residential portfolio in Madrid with the acquisition of 17,630-home affordable housing portfolio. ING is also establishing a flagship Spanish office at Castellana, while Dazia Capital and BGO are partnering in a EUR 500m Spanish residential investment.
Further east, the Central and Eastern European (CEE) region is showing tremendous strength. The GRI Barometer placed Poland's capital, Warsaw, above traditional Western hubs like Frankfurt and Munich in terms of promising opportunities, highlighting the region's increasing importance, driven by strong fundamentals and growing global interest.
Capital inflows into the region’s CRE market broke records in the first half of the year, as the Czech Republic recorded a 187% year-on-year increase in H1 2025, reaching a total of EUR 2.08 billion, while Slovakia reported record growth of 315%. Overall, the region saw a 51% year-on-year increase in total investment volume.
Look out for the Market Radar Europe every week!
This stability, coupled with strong demand and a slowdown in new construction, suggests that the market may be on the verge of a new expansionary cycle.
Investor confidence is growing, with the recent GRI Barometer revealing that 73% of industry players are currently investing or expanding their businesses. This indicates a resilient and strategic approach, where decision-makers are moving forward with projects while actively managing risks.
Key investment hubs emerge across Europe
Southern Europe is particularly attractive to investors right now. The GRI Barometer ranked Madrid as the most promising city for real estate investment, with Lisbon tying for second place with London.
This sentiment is backed by a growing presence of major real estate firms in the Spanish capital, including DWS as they expand their residential portfolio in Madrid with the acquisition of 17,630-home affordable housing portfolio. ING is also establishing a flagship Spanish office at Castellana, while Dazia Capital and BGO are partnering in a EUR 500m Spanish residential investment.
Further east, the Central and Eastern European (CEE) region is showing tremendous strength. The GRI Barometer placed Poland's capital, Warsaw, above traditional Western hubs like Frankfurt and Munich in terms of promising opportunities, highlighting the region's increasing importance, driven by strong fundamentals and growing global interest.
Capital inflows into the region’s CRE market broke records in the first half of the year, as the Czech Republic recorded a 187% year-on-year increase in H1 2025, reaching a total of EUR 2.08 billion, while Slovakia reported record growth of 315%. Overall, the region saw a 51% year-on-year increase in total investment volume.
Look out for the Market Radar Europe every week!