BNP Paribas Real Estate Investment Management (BNP Paribas REIM) presents its Lighthouse Report for H1 2025, an outlook for the European real estate market using its in-house forecasts, analysis, and the expertise of its local teams. In this tenth edition, BNP Paribas REIM defines its convictions and provides the investment strategies to adopt considering the expected macroeconomic and financial environment for 2025.
The market gains momentum in EU as interest rates decrease
Real estate is looking attractive to investors following its repricing, particularly for multi-asset investors looking to rebalance their portfolios. Investor interest is wide ranging, and even niche sectors – such as data centers, hospitality and healthcare – are often at the top of investors’ buying lists. Of the main sectors, logistics is currently top in terms of investment volumes, which should continue into 2025 as one of the best performing sectors over the next five years.
There is growing optimism around the outlook for real estate markets. Inflation has slowed and central banks have begun to lower key interest rates. This decrease, paired with a reduction of borrowing costs, the return of liquidity and the stabilisation of prime real estate yields strengthens the investors’ confidence in the market.
However, the real estate market recovery is still fragile and institutional investors are taking time to return to the market. The occupational market and the future pipeline will be crucial to determine how and when sectors will rebound and there are still some risks that could delay higher liquidity and stronger returns. Yet as prices are now stabilising and liquidity is slowly returning, windows of opportunity are opening for investors seeking appealing returns, especially when focusing on the megatrends that drive demand.
“The main role of real estate is to provide diversification in a multi-asset portfolio. Real estate is attractive but investors’ approaches are shifting. Passive strategies merely collecting rent for an income return are less appealing, investors are now interested in value-add and will consider a wide range of real estate sectors and investment opportunities that form a good risk-return mix” comments Laurent Ternisien, Deputy Head for BNP Paribas REIM.
Download the press release for more details
Read on to discover the 4 key trends for real estate investment in 2025.
