While volumes are still below the five-year average, certain regions are recovering more rapidly than others. Southern Europe and Central and Eastern Europe (CEE) have shown particular resilience. In Southern Europe, investment volumes are expected to be up 11% year-on-year while CEE volumes have risen 16% year-on-year. Among the core markets (UK, Germany and France), the UK is rebounding strongly with a 26% year-on-year increase.

James Burke, Director, Global Cross Border Investment at Savills, says: “The European real estate market is showing signs of increasing activity, particularly since the return from the summer break. A key boost came on 12 September, when the European Central Bank decided to cut interest rates for a second time, which positively impacted market sentiment across the Eurozone. Since then, investor interest has been growing, supported by improving pricing conditions and an increasing number of assets coming to market.”

Savills forecasts that year end investment volumes for Europe will reach around €170 billion, a 15% increase on the previous year. This trend is expected to continue into 2025, with full year figures potentially reaching €219 billion, which would represent 29% year-on-year growth.

Lydia Brissy, Director of European Research at Savills, says: “Across Europe, yields are expected to remain stable over the next six months, with compression likely for logistics assets and, to a lesser extent, retail parks. Shopping centre yields may continue to increase slightly. From March next year, the hardening of prime yields should begin to spread across asset classes throughout Europe.”