According to Reuters, Europe’s commercial real estate market remains subdued. In Q1 2025, total transaction volume reached €47.8 billion — less than half the level recorded three years ago. 

Preliminary estimates indicate that cross-border investment volumes declined by 20% year-on-year in Q2 2025, reaching €17.2 billion, the lowest figure in the past decade. 

Investor interest in private credit instruments is rising: in the first half of 2025, inflows into this segment totaled $39.9 billion, nearly double the funds allocated to real estate investment vehicles, which amounted to around $20.6 billion. 

Office properties and outdated shopping centers are experiencing falling demand, whereas logistics facilities, hospitality assets, and rental housing continue to retain investment appeal. 

In Germany, commercial real estate sales volumes fell by an additional 2% in H1 2025. Overall, market dynamics indicate low liquidity and limited willingness among participants to close deals at current price levels. 

Comment from the Investment Division of M24 SunShine 

Stagnation in Europe’s commercial real estate market is deepening, and even growing investor interest in private credit fails to offset the decline in traditional investment channels. The reduction in cross-border deals to decade-low levels signals structural liquidity challenges. Elevated interest costs and widening gaps in pricing expectations between buyers and sellers continue to suppress activity. With demand for offices and aging shopping centers still falling, recovery may be prolonged.