Commercial Real Estate Market in Europe Size to grow by USD 94.59 billion between 2024-2028
According to a research report “ Commercial Real Estate Market in Europe” by Type (Rental, Lease, Sales) End-user (Offices, Retail, Leisure, Industrial and others) Geography (Europe)- Global Forecast to 2028 published by Technavio, the market size is estimated to grow by USD 94.59 billion, at a CAGR of 6.08% during the forecast period. Private investment in Europe's commercial real estate sector encompasses the acquisition of physical assets such as land, offices, and commercial buildings by individuals and businesses. This investment category dominates the overall private investment landscape, with a significant portion allocated to commercial structures. While the majority of business investment goes towards equipment and software, a substantial portion is dedicated to the procurement of physical assets for commercial use. The escalating industrial investment trend fuels the demand for commercial real estate consulting services, enabling investors to optimally allocate resources and make informed decisions regarding profitable business areas and strategic investment focus.
Browse market data tables, figures, and in-depth TOC on “Commercial Real Estate Market in Europe” by Type (Rental, Lease, Sales) End-user (Offices, Retail, Leisure, Industrial and others) Geography (Europe) Global Forecast to 2028. Download Free Sample
By Type, the Rental segment is projected to dominate the market size in 2024
In the European commercial real estate market, economic indicators play a pivotal role in shaping real estate values. These indicators include Gross Domestic Product (GDP), employment figures, manufacturing output, inflation, exchange rates, interest rates, and mortgage rates. A weak economy can negatively impact real estate values, particularly in the hospitality sector. Unlike office space, which benefits from long-term leases and outright purchases, the hospitality industry experiences shorter occupancy cycles, rendering it more susceptible to economic downturns. Consequently, the revenues and returns of the hospitality sector can significantly suffer during economic instability.
By End-user, Offices segment is expected to hold the largest market size for the year 2024
The European commercial real estate market witnessed significant growth in the rental segment in 2023, accounting for the largest market share. This sector involves the rental of properties for commercial activities, including retail spaces, offices, industries, and other structures. Notably, the European office rental market experienced a robust acceleration of 1.8% quarter-on-quarter in Q3 2022, resulting in an annual growth rate exceeding 5%. The UK, Benelux markets, and peripheral Europe reported the highest quarterly growth. However, investment markets exhibit cautious sentiment, with buyers hesitant to meet earlier price levels due to economic uncertainties, inflation, and finance rates.
Europe is forecasted to hold the largest market size by region in 2024
In the European commercial real estate market landscape of 2023, Germany holds the largest market share. This popularity stems from its robust and adaptable economy, political stability, and a highly skilled labor force of over 80 million individuals, bolstered by a substantial presence of qualified expatriates. These factors collectively contribute to Germany's enduring allure as a prime investment destination for commercial real estate.
The Commercial Real Estate Market in Europe growth and forecasting report also includes detailed analyses of the competitive landscape of the market growth and forecasting and information about 20 market companies, including:
.
For insights on company offerings- Request a sample report!
Research Analysis Overview
The European commercial real estate market is experiencing significant changes driven by various factors. Landlords are adapting to the new normal by offering managed office facilities that cater to hybrid work patterns. Technology-driven solutions, such as virtual tours and contactless lease signing, are becoming the norm. Sustainable designs and adaptable office spaces are in high demand, with engineers and architects incorporating energy efficiency and flexibility into new projects. Property valuations, cap rates, absorption rates, rental rates, and vacancy rates are key metrics closely watched by investors. The Middle-class consumers and working-age population in metro cities continue to drive demand for office occupancy. Meanwhile, the e-commerce sector is booming, leading to increased demand for fulfillment centers and warehouses. E-commerce spending, hybrid work models, and digitalization of the commercial sector are attracting foreign investments. Media portals and brokers are essential resources for staying informed about market trends. Urbanization, social distancing, and travel restrictions are shaping the future of commercial real estate in Europe. Managers and investors must stay agile and adapt to these changes to thrive in this dynamic market.
Market Research Overview
The European commercial real estate market is undergoing a significant transformation, driven by various trends and factors. One of the key areas of focus is sustainability, with an increasing emphasis on reducing carbon footprint through the use of solar panels, green building certifications, and sustainable construction methods. Another trend is the growth of co-working spaces and technology-driven solutions, such as virtual reality tools, PropTech systems, data analytics, and sensors, which are making buildings smarter and more adaptable to changing work patterns. The e-commerce sector is also having a major impact on the commercial real estate market, with the rise of omnichannel strategies, ship-from-store, curbside pickup, and click-and-collect services leading to the demand for fulfillment centers, warehouses, and adaptable office spaces. Changing customer behavior, driven by the digitization of work and the working-age population's increasing use of technology, is also influencing rental rates, vacancy rates, and property valuations. Landlords, managed office facilities, engineers, architects, attorneys, property managers, appraisers, lenders, and investors are all adapting to these trends, with a focus on creating sustainable designs, energy-efficient features, and digital infrastructure to meet the needs of tenants and consumers. The commercial sector's digitalization, urbanization, social distancing, and travel restrictions are also impacting cap rates, absorption rates, and rental rates in various markets. In addition to office buildings, the residential real estate market, healthcare centers, specialty properties, industrial facilities, bars, restaurants, departmental stores, apparel, grocery stores, and retail sales are also being affected by these trends. Foreign investments and the changing role of managers and brokers are also important factors to consider in the European commercial real estate market.
Contacts
Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/
