Positive Outlook for the European Real Estate Market in 2025
- Redação Mudei e Agora
- Jun 25
- 2 min read
Aberdeen Investments has released its “European Real Estate Market Outlook Q2 2025” report, projecting a total return of 7.4% in the European market by 2025, supported by good asset allocation and growth in earnings.
Key findings of the report:
Risk-adjusted returns on the rise: the yield spread on German bunds has stabilized at around 240 basis points, an attractive level with yields higher than long-term rates;
Combined returns and appreciation: in 2024, the total returned 4.8%, with capital growth, especially in countries such as Portugal, Spain, Sweden, the Netherlands and Denmark;
Strong sectors: logistics, residential and hospitality are the most resilient, especially in the face of scarce supply and migration flows in key cities;
Investment volume up: +46% in the last quarter of 2024, +15% for the whole year, reflecting improved liquidity and greater confidence;
Forecast: annual total income growth of 9.3% and 8.8% in three and five years, respectively.
The main opportunities lie in prime (core), value-add and alternative assets such as data centers, student housing, and strategic retail.
The report also warns of risks: rising rates due to geopolitical stress, commercial tariffs and a European economic slowdown — although severe recession scenarios are not expected. Even so, lower rates will favor greater property appreciation.
For investors, the thesis recommends:
Focus on core and core-plus products, prioritizing efficient operations and stable cash flow;
Allocation to defensive sectors with income growth;
Balanced geographic diversification, including southern countries such as Portugal and Spain.
Institutional investors see this final scenario of rising interest rates and inflation as an opportunity to enter a market considered cheap, given the potential for yield and appreciation, supported by the macroeconomic and real estate context.
Source: Aberdeen Investments
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