EMEA commercial real estate shows early recovery signs

The latest Colliers EMEA Capital Markets Snapshot for Q3 2025 reveals early signs of recovery in the commercial real estate market across Europe, the Middle East, and Africa. 

EMEA Snapshot - Colliers

Investor confidence is slowly returning, driven by improving market fundamentals and more accessible debt.
Prime office markets in major gateway cities like London and Paris are showing the first signs of recovery, with stable pricing and sustainable yields attracting both institutional and private capital. Core markets continue to see rental growth, while secondary offices in regional cities face ongoing pressure. The stabilization of interest rates (outside the UK) and better debt availability are boosting core investment.
Investor demand for Industrial & Logistics assets remains robust, particularly in Germany, the Netherlands, and France, where supply is limited. Capital values have stabilized, and moderate rental growth is anticipated. The biggest challenge is finding suitable investment-grade properties, as demand still outpaces availability for modern, well-located warehouses that meet evolving supply chain needs.
The retail sector is experiencing a selective recovery. Retail parks and dominant shopping centres in Spain, Germany, and the UK show resilience, benefiting from repriced yields and stronger rental fundamentals in convenience-led parks. High street retail is mixed, with growth in London and Madrid, but quieter activity in regional areas. Investors are increasingly favouring direct investments over funds to actively manage assets.
Living remains a key focus for investors, with Purpose-Built Student Accommodation (PBSA) leading large-scale deals, especially in continental Europe. Multifamily and Build-to-Rent (BTR) assets require further pricing adjustments, particularly in regional cities, to attract new capital. The UK market is mature, while continental markets are driving growth and portfolio transactions.
Alternative sectors, including data centres, self-storage, and technology-related real estate, are seeing strong growth. Data centres are particularly in demand due to AI expansion and digital infrastructure needs. Capital is increasingly being deployed through direct investments and joint ventures rather than traditional funds.
Colliers predicts that transaction volumes will increase into Q4 2025 and early 2026, supported by improving fundamentals, steady rental growth, and better debt access. Office and industrial vacancies are bottoming out, and the retail and living sectors continue to attract selective capital. Investors are becoming more decisive for high-quality, strategically aligned assets, leading to a cautiously optimistic outlook for EMEA commercial real estate despite ongoing uncertainties.
Luke Dawson, head of Global & EMEA Capital Markets, commented: “Investor sentiment is improving across EMEA in most asset classes. Stabilising yields and improved debt conditions underpin a cautiously optimistic outlook heading into Q4 2025 and early 2026.”