According to new research from commercial real estate group CBRE, Europe's real estate sector is recovering at the pace of years of exhausted activity, with investments increasing by a quarter in the past 12 months.

Investment in European real estate increased by 6% per year to 45 billion euros ($51 billion) in the first quarter of 2025. During the year, investment volume increased to 25% to 213 billion euros.

Inflows spanned a range of inflows based on multiple areas, with multiple residential and student housing accounting for allegations, up 43% over the year. According to CBRE's 2025 European Investor Intent Survey, the industry has been previously identified as the main target for European cross-border real estate investment.

Retail investment subsequently lagged behind, up 31% year-on-year in the past 12 months and 26% in the first quarter of 2025 (growth more than any other sector).

Over the past year, the annual growth rates of hospitality, industry and logistics, and offices have increased by 23%, 19%, and 16%, respectively. Meanwhile, health care is the only area where lower investments are recorded during this period.

Data reflect similar insights from UK real estate companies RightMoveEarlier this month, it cites a revival of investment volumes in the UK's key offices, industrial and retail sectors in the first quarter.

This is because the European real estate sector showed signs of improvement in 2024 after the European Central Bank and the Bank of England lowered interest rates, and the growth outlook in various major markets has improved.

CBRE still warns that recent global economic sentiment, led in part by the new U.S. tariff regime, could impact investment appetite.

Chris Brett, head of European capital markets at CBRE, said: “In 2025, retail, living and office assets look particularly attractive, with retail, living and office assets starting at a steady start.”

“However, we are aware of the rapid changes in the macroeconomic environment and expect a more cautious attitude from sellers and buyers to volatility in the market.”

The IMF cut its 2025 global growth forecast to 2.8% last week, down 0.5 percentage points from previous estimates, which is a "significant negative impact on growth." Financial institutions also lowered the growth outlook for the eurozone this year from 1% to 0.8%.