UK investment volumes fell 11% to €13.9bn in Q2 2025 compared with the same period in 2024, according to MSCI’s latest Europe Capital Trends report.
Despite the fall, the UK was still Europe’s most active real estate investment market and accounted for more than double the investment volumes recorded in next-placed Germany during the quarter.
London was the top investment destination in Europe, although investment volumes fell 17% in H1 2025 compared with the first half of 2024. There was a 27% increase in investment in UK office assets during H1 2025 with Central London offices proving attractive to investors.
MSCI’s data shows Europe’s commercial real estate investment market stalled in the first half of 2025 as investors were unsettled by the potential impact of US trade tariffs on the region’s economic growth.
A total of €46.2bn of transactions completed in the second quarter of 2025, down 10% compared with the same quarter in 2024. That took total investment activity for H1 2025 to €91.7bn – a 7% decline on the same period last year.
Tom Leahy, head of EMEA real assets research at MSCI, said: “The uncertainty that followed US tariff announcements in April meant it was natural some investors would pause from making real estate deals while they waited for clarity. In contrast to the volatility in equity markets, real estate’s illiquidity means lower deal volumes are often the first response to external shocks, like those of April 2.
“There are some tentative signs that things may be settling down. The pipeline of deals pending completion at the start of July was the strongest in three years, suggesting a modest rebound. Falling interest rates in the Eurozone are supportive for pricing and certain occupier markets have been performing robustly. Some segments of Europe’s most liquid office markets are also recovering. This bodes well for a better second half of the year, assuming there are no additional shocks.”
