By Virginie Wallut, Director of Research and Real Estate SRI, La Française Real Estate Managers.
In the first half of 2024, the European real estate market showed signs of recovery, with investment volumes up year-on-year. This recovery in the European real estate market began in anticipation of monetary easing by the ECB.
In June, the ECB made its first rate cut since September 2019, reducing its key interest rates by 25 basis points. The move marks a turning point in monetary policy and fuels prospects for a recovery in the real estate sector.
Mixed recovery in the European commercial real estate market.
While in France, the real estate markets remain suspended on the evolution of the French political context and its consequences on French sovereign rates, investment volumes in Europe show an increase of 11% over one year, in the first half of 2024. Although these volumes remain modest compared to the ten-year average, the increase in volumes nevertheless marks a major change in the direction of real estate markets in Europe.
The situation is, however, very contrasting depending on the country. Thus, while countries that have significantly corrected in 2023, such as BeNeLux, Germany and the United Kingdom, show respective increases in investment volumes of 73%, 23% and 9%, France, for its part, shows a decline of 25% over the same period.
All asset types saw an increase in investment volumes in the first half of 2024, led by tourism (+62%), followed by logistics (+7%), healthcare (+4%) and finally offices and retail (with +1% respectively). However, core assets (central and meeting the latest environmental standards) and diversification assets (logistics, healthcare, tourism and managed residential) remain the most sought-after.
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