From discussions among the Society of Industrial and Office Realtors’ (SIOR) 4,000-strong membership, and newly formed Global Business Growth Group, it’s clear that commercial real estate across Europe will still be influenced by the shifting global geopolitical climate in 2026.

The significant impact of the US will continue to be felt, notably the Trump administration’s changing trade policies – although we are already seeing some rollback on certain tariffs. Looking at the office and industrial sectors, major US organisations are holding off on signing large new leases in Europe as they await greater clarity – with next year’s Midterm elections serving as a bellwether for the way ahead. 

ESG will remain a hot topic, with a widening gap between the US and European attitudes. Although undoubtedly an important factor proven to enhance asset value, there’s a growing view in Europe that the region is over-regulated and may need to ease some of the more stringent sustainability targets to remain competitive. That can be seen by recent announcements of the EU’s intention to push back the 2035 ban on sales of new petrol and diesel vehicles. 

An additional way to bolster competitiveness is through more investment into the AI race, which will only grow in importance in the coming years. This will include reconsidering current restrictions on where data centres can be built, as well as ensuring adequate power supply and resilience.

High fuel costs pose an ongoing challenge for Europe, affecting energy-intensive sectors like manufacturing. The focus will therefore be on strengthening energy security and resilience by exploring alternative energy sources, from renewables to nuclear, in the near term. 

For offices, the flight to quality will persist, and the divide between Grade A and lower quality stock, as well as between prime and secondary locations, will continue to increase. That’s why, despite higher construction costs, developers will need to avoid cutting corners to maintain the high standards of amenity-rich, user-centric workplaces required to attract – and then retain – modern occupiers.

Outdated stock faces the risk of obsolescence, due to tightening regulations and occupier demand for more efficient, quality space. Stranded assets that are no longer fit for purpose will be repositioned into other uses. For investors, future-proofing will be crucial, as will considering what alternative uses may better suit an asset five or ten years down the line. 

Industrial markets will be impacted by China’s dominance of European imports – affecting areas such as car manufacturing in Germany, with automotive assets potentially repositioned. On the flip side, we will also see higher demand for logistics and distribution centres to handle the influx of imports. 

In the next year and beyond, the key for our industry will be to adopt an agile mentality to navigate the challenges and come out stronger. Europe’s commercial real estate industry is not out of the woods; however, there is some cautious optimism that we may see an uplift in activity and investment opportunities from the second half of 2026.