European real estate investment activity is showing signs of stabilising, according to the latest research from Savills.
The company estimates investment volumes in Q1 2024 will hit €34bn, which would be down on the same period last year but take the year to 31 March 2024 figures to €144bn, just €5bn below the figure achieved in the previous four quarters. Investment volumes for the full year to 31 December are expected to hit €177bn-€182bn – up 19% to 22% on the €149bn recorded for 2023.
Savills forecasts core markets such as the UK, Germany and France will see the lowest decreases in activity in Q1 2024 of circa 5% compared with Q1 2023, as pricing in these markets adjusted faster than in other European markets.
Tristam Larder, head of European capital markets at Savills, said: “As the gap in buyer and seller price expectations is beginning to close, we anticipate seeing a gradual resurgence in investment activity from H2 2024 onwards. Logistics and multifamily will remain the preferred asset classes in Europe this year, although there is a growing appetite for retail properties and given recent price adjustments, we are also seeing more and more investors enquire about offices.”
Lydia Brissy, director European research at Savills, added: “Central and Eastern Europe and the Nordics are anticipated to see the largest annual growth rates in investment volumes, with increases of 28-40% and 17-35% expected at year-end, respectively, on the back of relatively low volumes recorded in 2023. Southern Europe is expected to bounce back by 12-21%, while the core markets are forecast to see an annual increase of 16-19% and the rest of Western Europe a 15-17% increase in year-end investment volumes.”
