European CRE sees steady growth in 2025

Cushman & Wakefield's latest "DNA of Real Estate" report indicates a positive trend in European commercial real estate markets throughout 2025. 

Commercial real estate - Cushman & Wakefield

Prime rents are rising, and prime yields are tightening across all major sectors, signalling increased occupier activity and stronger investor interest in high-quality assets.
European prime office rents grew by 4.6% in 2025, consistent with 2024's 4.9% increase, driven by demand for prime, well-located properties. Over 70% of office markets saw growth, with notable increases in the UK (+8.6%), France (+8.2%), Milan (+9.6%), Barcelona (+5.0%), and Warsaw (+9.1%). Limited availability of top-tier, centrally located spaces continues to fuel rental increases. Prime European office yields also tightened by 9 basis points (bps) to 5.37%, with significant inward shifts in Southern Europe, Benelux, the UK, and CEE markets. The office sector has seen the largest inward shift of 16bps, with yields tightening for six consecutive quarters.
Prime European high street retail rents rose by 4.4% in 2025, an improvement from 3.6% in 2024, with just under 60% of markets showing annual increases. Robust demand, improved retailer confidence, and limited supply are driving this growth, with several key shopping streets experiencing double-digit increases, including Bucharest’s Calea Victoriei (+33%) and London’s New Bond Street (+14.6%). European high street yields saw the strongest inward shift of any sector, tightening by 11bps to 4.76%. Southern European markets and CEE led these shifts, along with the UK & Ireland.
European logistics rents increased by 3.6% in 2025, slightly up from 3.4% in 2024, with over 70% of tracked markets reporting growth. Strong occupier demand, limited supply, and new, high-specification facilities are the primary drivers. Brussels (+17.6%), Paris (+12.0%), Lisbon (+8.7%), Leeds (+10.5%), and Birmingham (+8.7%) saw strong growth. Prime European logistics yields tightened by 7bps to 5.20%. Southern Europe (-23bps), the Nordics (-17bps), and Benelux markets (-13bps) registered the largest inward shifts, indicating widespread improved sentiment in these regions.
Nigel Almond, senior director, Global Property Research & Intelligence, at Cushman & Wakefield, said: "Strengthening occupier demand and renewed investor confidence are driving both rising rents and inward yield shifts, with almost 80% of our tracked office, high street and logistics markets across Europe reporting rising values over 2025. This continues the positive momentum observed in the second half of 2024, with European office values now 10.9% above their trough two years ago, closely followed by high street shops at 10.7%, and logistics at 9%."