Stabilising yields, renewed investor confidence, and a clearer outlook heading into Q4 2025.
Europe’s commercial real estate (CRE) market is entering the final quarter of 2025 with noticeable signs of stabilisation. After two challenging years marked by inflation-driven uncertainty, rising financing costs, and subdued transaction activity, the most recent data from major research houses points toward a more balanced and predictable environment.
According to Cushman & Wakefield’s Q3 2025 DNA of Real Estate report, yields across key asset classes held broadly stable, signalling that downward pressure may be easing. Meanwhile, Savills forecasts total European investment volumes to reach approximately €130 billion by the end of Q3 2025, indicating renewed investor participation and more confidence in pricing.
Prime Yield Snapshot – Europe (Q3 2025)
- Offices – Prime yield ≈ 5.39%
- Retail (High Street) – Prime yield ≈ 4.78%
- Logistics – Prime yield ≈ 5.23%
- Residential / Living – Prime yield ≈ 4.05%
These figures highlight a market that is gradually finding equilibrium. Logistics and residential remain the most competitive segments, supported by structural demand drivers, while offices continue to reprice as occupiers and investors adapt to hybrid work trends. Retail, once the most challenged sector, now shows selective resilience with high-street locations performing strongly.
Investor Outlook Going Into Q4 2025
As yields stabilise, more buyers are returning to the market to pursue opportunities where repricing has already occurred. At the same time, vendors are becoming more realistic, helping to narrow the bid–ask gap that has hindered dealmaking for much of the past two years.
Expect to see increased activity in:
- Value-add office repositionings in major European capitals
- Urban logistics and last-mile assets, where rental growth remains outpaced by demand
- Living sector schemes, particularly PBSA, BTR, and senior housing
- Selective high-street retail, driven by tourism and strong local income demographics
Overall, the shift toward more stable yields and growing transaction volumes indicates that the European CRE market is entering a more predictable and active phase, offering improved opportunities for investors across the risk spectrum.
