European Real Estate Investment: Outlook for H2 2024 and Beyond

The European real estate market is poised for a dynamic shift as we move into the latter half of 2024 and beyond. Despite the current economic headwinds, several trends and opportunities are emerging that make this a sector worth watching.

Key Trends and Growth Areas

Logistics and Residential Sectors: The logistics sector continues to thrive, fuelled by the rise of e-commerce and the need for efficient supply chains. Urban logistics, in particular, is set to benefit from strong demand fundamentals. Residential properties, including student housing and co-living spaces, are also seeing significant investor interest due to persistent housing shortages in major cities.

Retail Properties: Surprisingly, retail properties are making a comeback. Investors are eyeing distressed assets for repurposing, taking advantage of the price corrections seen over the past year. This sector is likely to see increased activity as consumer confidence improves and urban centres adapt to new retail models.

Energy-Efficient Buildings: Green is the new Black!

In a previous article we highlighted the importance of ESG. Now, ESG considerations are driving investment in energy-efficient buildings. With the European Union pushing for decarbonisation, assets that meet stringent environmental standards are becoming more attractive to investors. This trend is expected to continue, with a focus on both new builds and retrofits of existing properties.

Investment Flows

Investment volumes are projected to rebound in H2 2024, with an expected increase of 19-22% compared to 2023. The UK and Germany are likely to lead in cross-border investments, benefiting from significant price adjustments and strong market fundamentals. The CEE and Nordic regions are also anticipated to see substantial growth due to their low base volumes in 2023.

Timing the Momentum Shift

The turning point for the real estate market is closely tied to interest rate movements. The anticipated rate cuts by the European Central Bank in 2024 are expected to ease financing conditions, which should catalyse investment activity. Prime assets are already showing signs of stabilising, and we expect broader market recovery to gain momentum towards the end of 2024 and into 2025.

Recruitment in the Real Estate Funds Sector

As the market heats up, recruitment in the real estate funds sector is also poised to pick up pace. We have already seen gentle growing demand for professionals with expertise in asset management, sustainability, and financial structuring. Companies are actively seeking talent to navigate the complex market conditions and capitalise on emerging opportunities. 

Conclusion

The outlook for European real estate investment is cautiously optimistic. While challenges remain, particularly in financing and economic stability, the opportunities in logistics, residential, and energy-efficient properties are compelling. As the market adjusts and recovers, savvy investors will find attractive entry points.

Marks Sattin is a specialist financial services recruitment consultancy. We have over 30 years’ experience placing experts within financial services, ranging from fund accountants, treasury assistants, Fund Controllers and governance specialists.

For specialised accounting and finance recruitment tailored to the real estate sector, get in touch with me at Marks Sattin today. Let us help you build the team you need to thrive in this challenging market.