Knight Frank: Doubling down on offices and living sectors

As the gates opened at MIPIM 2026, the real estate community is once again at a  familiar crossroads: a market ready for recovery, yet facing the "noise" of sudden geopolitical instability in the Gulf.

Anthony Duggan

For Anthony Duggan, Chair of Europe at Knight Frank, the prevailing mood is not one of panic, but of a deeply ingrained industry stoicism. “So far, the sentiment remains that the underlying fundamentals are in place," he observed during an interview with CRE Media Europe in Cannes.

The office sector has returned as a top target for 2026, with focus shifting toward high-quality, ESG-compliant assets in prime city centres. Similarly, logistics and data centres are being driven by the ongoing restructuring of global supply chains and the rapid digitalisation of the economy. From student housing to super-prime residential, the living sector continues to attract significant institutional and private wealth.

Regionally, Iberia is bolstered by strong demographics and resilient economies, with Madrid standing out for both commercial and residential investment. Poland and the Czech Republic are benefitting from a "young, enthusiastic population" and a significant influx of domestic capital. Meanwhile, Northern Italian logistics remain a "really good place to be," while the residential sector is successfully attracting international interest through favourable tax structures.

After a period of stagnation, Germany is expected to experience a significant re-emergence in 2026. While the residential side remains positive in France—evidenced by Knight Frank's new residential department in Paris—the commercial sector is still "struggling a bit" due to a mix of political noise and economic weakness.

Duggan also highlighted two "quieter" forces reshaping the market: ESG and distressed assets. In Europe, ESG is no longer just a "buzzword" but a regulatory necessity. Furthermore, as banks begin to take action across Europe, distressed assets are expected to provide much-needed liquidity to the market.

Looking ahead, Knight Frank will focus on expanding its residential network in Paris, Italy, and Greece, as well as on hotels and leisure, a sector expected to boom over the next decade.

Branislav Pekic