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European Outlook 2024: The Tide is Turning


Unlock the future of real estate

The 2024 European Outlook by Cushman & Wakefield is tailored for investors and property owners, our insights offer a clear path through the complexities of today’s market.


  • The commercial real estate market is facing a pivotal point with property values nearing a potential bottom due to higher borrowing costs.

  • As inflation in the short term adheres to the projected path, this, in turn, instils confidence that monetary policy is appropriately restrictive, hence, we anticipate Central Banks to maintain their current stance, at least until H2 2024.

  • Central Banks will maintain a vigilant oversight of underlying inflationary forces, particularly in the services sector, where wages continue to exhibit an upward trend.

  • The euro area and the UK are expected to narrowly avoid a recession with modest growth rates; however, the risk of recession remains.

  • Investment is anticipated to remain restrained in the latter part of 2023 due to a challenging economic environment.

  • Government bond yields are expected to peak in 2024, reflecting the consensus that interest rates will stay elevated for a while.

  • There is a lag in real estate valuations catching up with market yields, leading to a slower price discovery process, especially in the office sector.

  • Yields across all sectors are expected to expand further throughout the year, with office yields witnessing the largest outward movement.

  • In light of the prevailing interest rate climate and the recent reassessment of risk, certain markets are currently offering appealing entry points for investors.

  • Despite the economic slowdown, leasing activity remains relatively strong, with positive rental growth anticipated across sectors.

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Economy & CRE Investment

The economy has seen stagnant growth and diminishing inflation, with Central Banks intensifying rate hikes. Inflation is on the expected path, encouraging Central Banks to continue their policies until at least H2 2024. Property values are projected to inflect in Q3 2024, coinciding with economic recovery and interest rate cuts.
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The European office market is adapting to hybrid work models, with a surge in flexible spaces and 'option space' in leases. Demand for Grade A office space remains strong, with a focus on quality and sustainability. Investment is shifting towards value-add opportunities in the office sector, especially in high-quality offices with strong ESG credentials.

Logistics occupier activity has slowed down, aligning with pre-pandemic levels. Vacancy rates are rising due to increased supply, and developers are becoming more cautious. Investment activity is expected to recover as pricing stabilises, with different capital strategies emerging.

The retail sector faces challenges from inflation, interest rate hikes, and low consumer confidence. Despite stagnant trade volumes, there's a growing demand for immersive retail experiences. Retail asset pricing is shifting towards value-add strategies, focusing on sustainability and community engagement.

The living sector, including senior living and student accommodation, sees sustained demand due to demographic trends and urbanisation. Despite a dip in 2023 investment volumes, the sector remains resilient and significant for investors, representing 20-25% of transactions in the EMEA region.
Hotel lobby women coffee

The European hotel sector is showing resilience despite economic challenges, outperforming the broader real estate market. This is underpinned by the constrained supply and the strong operating performance recovery particularly in resort destinations and urban markets driven by leisure travel. This is expected to continue in 2024, albeit at slower pace.


Sukhdeep-Dhillon-Head of EMEA Forecasting
Sukhdeep Dhillon

Head of EMEA Forecasting
London, United Kingdom

+44 (7920) 574823

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Guilherme Neves
Guilherme Neves

Senior Research Analyst
London, United Kingdom

+44 (20) 32963892

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Dominic Brown

Head of International Research, Global Think Tank
Brisbane, Australia

+61 (431) 947161

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