60 Second Property Digest - European real estate outlook 2023

Our Active Capital research forecasts Europe to remain the top region for inbound CRE investment in 2023, although volumes are likely to moderate, reflecting global trends.

Liquid, safe-haven markets, especially in France, Germany and, the UK are expected to see inbound flows.

Private capital investment

We do expect private capital to take advantage of reduced competition and other international investors to take advantage of currency benefits to look at a range of CRE across Europe, including those more secondary assets which can be repositioned, at reasonable cost, to a higher ESG benchmark.

The focus is likely to be on smaller, individual sub $100million deals. There may also be equity and JV opportunities as a result of refinancing following an increase in the cost of debt, although European debt costs remain relatively attractive on a global scale.

Growing markets

The living sectors will see increased interest, including the counter-cyclical student and affordable housing sectors, as far afield as Spain and the UK.

Life sciences, and data centres will continue to attract capital, including in locations such as the Golden Triangle in the UK and innovation hubs such as Berlin and Munich in Germany.

Future infrastructure projects

Looking to the future, a number of large infrastructure projects are underway across Europe, from railways such as the Fehmarn Belt Tunnel linking Germany and Denmark to water-centric infrastructure projects such as Canal Seine-Nord Europe linking France and Northern Europe.

These will offer long term logistics opportunities for investors and developers alike, particularly as decarbonisation targets encourage more sustainable networks.

Discover more

You can find out more about how markets are set to perform in more detail throughout Europe in our European real estate outlook 2023.