W. P. Carey: Cautious market sentiment meets new investment horizons

As industry leaders gather for EXPO REAL 2026, the prevailing mood across European real estate is marked by caution, though seasoned investors see fertile ground for targeted growth.

Christopher Merlity

According to Christopher Mertlitz, head of European Investments at W. P. Carey, persistent geopolitical friction, economic headwinds in key regions like Germany, and shifting interest rate expectations continue to dominate boardroom discussions.

"Despite that backdrop, opportunities are emerging for investors that have the capital, experience and discipline to be selective," Mertlitz noted, projecting that overall transaction volumes will surpass last year’s figures.

Sale-Leasebacks and Industrial Focus

W. P. Carey remains particularly bullish on European sale-leasebacks, anticipating an uptick in activity over the next 12 to 18 months. As traditional financing channels remain costly or restricted in select markets, corporate reliance on flexible, long-term capital is hitting an all-time high.

Geographically, the firm is concentrating its efforts on Italy, Spain, Poland, and Germany, leveraging the deep industrial roots of these nations.

Mission-critical production facilities remain primary targets. Because these assets feature heavy capital investments in production infrastructure, they are difficult to relocate, cementing a long-term alignment between occupiers and investors.

Conversely, sectors such as automotive, chemicals, and consumer cyclicals are expected to encounter continued pressure.

Investment momentum is also accelerating among private equity-backed corporations utilising sale-leasebacks to unlock immediate capital for growth and M&A.

Despite these strategic focuses, Mertlitz underlined that the firm maintains a sector-agnostic approach, evaluating deals on individual tenant creditworthiness, asset criticality, and lease structure rather than broad market trends.

AI and Digital Infrastructure Boom

Unsurprisingly, AI is commanding significant attention at this year's conference. While the explosion of AI is fueling massive demand for digital infrastructure across Europe, Mertlitz urges a disciplined, analytical approach to data centre investments.

Key considerations for investors include securing reliable energy access and the need to maintain facilities competitive for the future.