Southern Europe real estate investments surge 30%

Transaction volumes on the Southern European real estate investment market, encompassing Italy, Spain, and Portugal, exceeded €12 bn in the first half of 2025, a 30% increase compared to H1 2024. 

Rome

According to research from Cushman & Wakefield, hospitality and retail are key drivers, supported by strong tourism and consumer spending. Urban regeneration, particularly converting offices into hotels and residences, is also gaining momentum. The Living sector is emerging as a growth area, especially in metropolitan areas.  Logistics and industrial sectors show promise but face supply challenges. 
Investors are increasingly interested in core+/value-add opportunities focused on transformation potential. Improved financing conditions contribute to Southern Europe's consolidation and growth in a maturing, diversified, and innovation-oriented market.
Italy saw real estate investments reach €5.1 bn (+46% y/y) in H1 2025, led by a strong rebound in hospitality and retail's recovery. The popularity of the hospitality sector was fuelled by robust tourism demand and increasing interest by institutional investors in the sector, particularly in the upscale hotel segment. Retail attracted investors to well-located and resilient assets. Office and Logistics investments were more selective, focusing on core+/value-add opportunities in strategic locations. Urban regeneration is becoming increasingly important, with the living sector expanding, especially in Milan and Rome.
Spain's investment market closed H1 2025 with approximately €5.7 bn, 16% higher than the same period last year. Hospitality (€1.6 bn) and retail (€1 bn) drove investment, with strong fundamentals. The living sector continued at a good pace, while logistics faced challenges. The office sector showed signs of recovery, especially in Madrid, with significant capital movement towards converting obsolete office buildings into living/hotel spaces.
Portugal recorded a total commercial real estate investment volume of €1.25 bn in H1 2025, a 70% year-on-year increase. Retail was a standout sector (€587 mln), with most investment concentrated in shopping centres. Hospitality maintained its appeal (€341 million). Office investment rose to €163 mln, although still representing 13% of total volume. Industrial & logistics volume grew significantly, while the living segment declined but is expected to recover.