W. P. Carey: European real estate at an inflexion point

After years of volatility, repricing, and limited liquidity, the European real estate market is showing signs of stabilisation, though recovery remains inconsistent across regions, according to Christopher A. Mertlitz of W. P. Carey.

Christopher Mertlitz

He outlines three key themes that will shape discussions as the industry gathers for MIPIM 2026 in Cannes this week.
Will European transaction volumes increase?
How will the sale-leaseback market respond to a significant amount of maturing debt?
Which sectors offer the best opportunities as investors adjust their strategies?
Transaction Volumes
Following a sharp repricing cycle, buyer and seller expectations have largely aligned, leading to clearer valuations and stabilisation across many markets. Improved transparency regarding interest rates and financing costs allows investors to underwrite returns with greater confidence. Savills predicts an 18% rise in European investment volumes in 2026, driven by firming prices, stable macroeconomic conditions, and a consistent return of institutional capital. However, recovery will be uneven, with liquidity favouring sectors and markets with strong fundamentals.
Sale-Leasebacks 
A significant theme at MIPIM 2026 will be the rising demand for alternative capital sources, particularly as a large volume of corporate and real estate debt matures. Many owner-occupiers face refinancing challenges due to selective and less accessible traditional bank lending, coupled with higher operating costs.
Sale-leasebacks are emerging as a strategic financing tool, allowing businesses to free up capital tied in real estate for growth, operations, and debt reduction while maintaining operational control.
Sectors to Watch: Industrial and Retail
Manufacturing and logistics assets remain attractive due to their critical role in supply chains, supported by structural trends like nearshoring, resilience, and e-commerce. Modern, well-located, and tenant-tailored assets are highly valued.
Opportunities exist in retail formats catering to non-discretionary or value-oriented consumer demand, such as grocery-anchored retail and DIY stores, which have shown resilience through economic cycles.
According to Mertlitz, MIPIM 2026 arrives as optimism returns to European real estate. While challenges persist, there is increasing evidence of capital deployment, especially in opportunities driven by strong fundamentals.