Cushman & Wakefield releases report analyzing the economic and real estate impact of the first 100 days of Donald Trump's second presidential term
While the global economy faces uncertainties such as new U.S. tariffs and instability in international trade, European countries are performing surprisingly well according to recent estimates. Although a slight slowdown in eurozone growth is expected, the economy is still projected to expand. According to Trump 2.0: The First 100 Days The First 100 Days, an analysis by real estate consultancy Cushman & Wakefield, U.S. tariffs and trade policy are likely to impact global markets and could prompt companies to relocate production closer to home markets.
The beginning of the year was stable for the European real estate market. Companies continue to show interest in leasing, and investors are gradually returning. More and more businesses are shifting production closer to home to avoid complications tied to importing from distant countries. This trend presents an opportunity for the Czech Republic, which—thanks to its strategic location and developed infrastructure - can attract new investments in industrial and logistics properties.
Despite a sharp pivot in U.S. trade policy under President Trump, Cushman & Wakefield’s base economic outlook remains optimistic. The European market is expected to remain resilient, even though growth in 2025 will likely be slower than initially forecast. Stronger growth is anticipated from 2026 onwards.
Pricing Resilience
Since central banks began raising interest rates in 2022, capital values declined for seven consecutive quarters - office assets lost approximately 22%, retail 16%, and logistics 12%. However, in Q4 2023, capital values rose 5–6% across all sectors. Cushman & Wakefield’s baseline scenario, reflecting the prevailing economic outlook, inflation trends, and government bond yield movements, forecasts a more sustainable recovery and a cumulative capital value growth of over 9% across all property types in the next two years.
Europe’s Fiscal Shift Enables More Spending on Defense and Investment
Europe’s transition from austerity to a more expansionary fiscal policy marks a key shift in economic strategy. Increased public spending—including defense—is intended to boost aggregate demand and drive new growth momentum. In response to geopolitical tensions—especially the war in Ukraine and uncertainty in transatlantic relations—EU member states are loosening fiscal rules to raise investment in defense, infrastructure, and energy transformation.
Sukhdeep Dhillon, Head of EMEA Forecasting, Cushman & Wakefield: “With inflation near target and further ECB rate cuts expected, financial conditions are likely to ease further. This should lower borrowing costs, boost investment and consumption, and support economic growth—creating a significant tailwind for the eurozone outlook. A more supportive macroeconomic environment will improve investor sentiment, leading to increased capital flows into European commercial real estate and higher demand across sectors.”
Recent Tariff and Duty Changes
Source: EIB Investment Survey 2024, European Investment Bank (based on a survey of approximately 12,000 firms across the EU27).
Rising Construction Costs: Existing Properties to Benefit
Tariffs on key construction materials such as steel and aluminum are likely to put additional pressure on project budgets. Developers may delay, scale back, or cancel certain projects. Impacts will vary by property type. Industrial facilities and data centers, which offer higher returns and stronger rental growth, are better positioned to absorb increased costs. In contrast, offices and retail are more likely to see refurbishment of existing assets rather than new development.
Kamila Breen, Head Research, Cushman & Wakefield “Any restriction in new supply is likely to drive rental pressure in high-demand sectors such as logistics and premium offices. This creates a clear advantage for existing commercial properties.”
Defense Spending to Boost Manufacturing Higher defense spending may revitalize European industry, create new jobs, and support overall economic growth. Expansion of government and defense agencies is also expected to drive demand for office space. As the defense sector is often linked with innovation in technology and engineering, increased spending could also fuel demand for specialized offices and laboratories.
Sukhdeep Dhillon said: “Trade barriers will motivate companies to move production closer to home, leading to long-term demand for domestic industrial space through onshoring and nearshoring strategies. Regardless of tariff impacts, diversifying supply chains is essential for manufacturers as a prudent risk management strategy.”
Opportunities for European Investors
The recent weakening of the dollar against the euro may limit capital inflows from the U.S. into European real estate. However, growing global uncertainty is pushing investors toward safer, more liquid assets—currently supporting demand for European government bonds. If investors shift focus toward less liquid but relatively safe assets, European commercial real estate could benefit despite higher pricing. While U.S. investors reassess their global strategies, domestic European investors may find new opportunities to deploy capital.
