In terms of location, southern Europe has become more favourable for investors with Spain now the most popular country to invest in, followed by the UK, France, the Netherlands and Germany. At the same time, all these countries have indicated an upturn in appeal year-on-year.

While assets in the €20m-€60m lot size remain most popular, as interest rates fall further, the international real estate advisor expects the number of larger transactions to increase towards the back end of 2025. 

James Burke, Director, Global Cross Border Investment at Savills, says: “Beds and sheds remain most in favour among investors but this year’s survey demonstrates a material uptick in interest for CBD offices, hotels, data centres and various retail sectors. This reflects a combination of repricing feeding through into the market, robust long-term occupational fundamentals and the return of accretive returns in certain sub-sectors, particularly in the Eurozone.”

Mike Barnes, Associate Director, European Research at Savills, adds: “In this year’s survey, there has also been a higher proportion of investors looking to increase their risk appetite, rising from 28% to 45% year-on-year. In a similar vein, more investors are willing to undertake a ‘manage to ESG’ strategy compared to 2024. This can partially be explained by the significant reduction in Europe’s development pipeline and strong competition for best in class assets as a result of which more and more investors are looking to move up the risk curve in order to achieve their return targets.”

-ends-

*The survey was run between 19th November 2024 and 6th January 2025, involving 40 EME, cross-sector investors, representing over €800bn of EME real estate AUM.