CBRE – Europe Real Estate Outlook, 2024

The CBRE Europe Real Estate Outlook for 2024 predicts another year of weak economic growth in Europe, although slightly stronger than the previous year. Risks are mainly related to geopolitical tension and core inflation. However, policy interest rates are expected to have peaked and inflation is forecasted to decrease throughout the year. Long-term interest rates are also projected to decline. With this backdrop, property investment is expected to improve as values are expected to reach their lowest point in 2024 and stabilize, leading to convergence in price expectations between buyers and sellers. Investment volumes are predicted to increase by about 10% compared to 2023. The occupier markets will have a mixed performance, with a growing polarization between the best assets and the rest. Office leasing is expected to pick up gradually, while logistics take-up is forecasted to decrease from previous highs. Retail is expected to benefit from improved consumer fundamentals, leading to increased footfall and sales. The living sector will continue to face undersupply challenges and strong occupier demand. Similar imbalances between demand and supply will be seen in sectors such as hotels and data centers. Additionally, sustainability will have a greater influence on real estate decisions across all sectors. Market players will prioritize alignment with environmental, social, and governance (ESG) agendas, and there will be an increased focus on gathering data on the costs and benefits of sustainability decisions.