After years of correction and consolidation, the European property market has stabilised during 2025. Despite subdued economic dynamics and geopolitical uncertainties, yields and purchase prices have been stabilising over recent quarters, and the markets are gradually recovering. There are attractive entry opportunities for countercyclical and targeted investment, offering secure long-term returns.

What are the advantages of investing in property? There is significantly less risk associated with property than with equities and debt instruments, and it recovers more quickly from price corrections. Debt instruments are expected to take several years to make up for the 18 percent losses of 2022. Property, on the other hand, recovered from the financial market crisis in less than three years and weathered the current correction phase by 2024 with a positive total return of 3.2 percent. Since mid-2024, prime yields have been stable and transaction volumes are rising. This suggests that the positive trend will continue.

Logistics – Logistics buildings at logistics hubs in a range of European locations are especially interesting. The continued growth in e-commerce sales and the trend towards regionalisation and reshoring of industrial supply chains further spur the demand in this segment.

Residential – The scarcity of housing offers potential for long-term value appreciation and ensures stable rewards, especially in metropolitan areas. The highest net prime yields of the European housing market can be achieved in Dublin (currently 4.8 percent). Rental prices are expected to further go up as well.

Investors can secure higher yields on alternative housing types than on mainstream residential property investments and also benefit from long-term stability of fundamental data. Student living and senior living are relatively new investment options. 

Both sectors are benefiting from social trends, such as mobile living, an aging population and the growing influx of international students. Small, fully equipped apartments located in urban areas are high in demand with students, young professionals, commuters and international experts. New forms of housing, such as micro living, are becoming the housing model of the future.

Hotel – The hotel sector is still on the upswing. Average prime yields stood at 5.3 percent and were thus higher than the yields delivered by properties of other use types. Besides Germany, the trend is particularly positive in Barcelona, Brussels and Vienna.

Office – Office investments can be selectively interesting. In particular, sustainably-designed (super) core properties with highly flexible space in good locations are in demand. In other European office markets too, property yields hit a nine-year and a fourteen-year high.

Despite the turnaround in interest rates and the massive corrections, the European real estate market is proving more resilient than many expected. Now is a good time to take advantage of long-term opportunities by making targeted investments.

The investment strategy of Real I.S. AG is based on this perspective. With our Real I.S. Ireland Residential Fund, investors benefit from the growth opportunities offered by the Irish residential market, whereas MODERN LIVING invests in a combination of traditional forms of housing and the micro apartments. The Real I.S. LOGISTIX fund focuses on selected logistics properties in European growth markets, and the open-ended real estate fund REALISINVEST EUROPA enables retail investors to participate in the development of these segments.