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A prolonged reset in the real estate market is continuing to keep the asset class in flux. After the challenges of the pandemic comes the surge in cost of debt that has precipitated a sharp and broad revaluation in the asset class.

While hybrid work models are here to stay, workplace plays a key role in attracting and retaining talent, both in terms of space quality and location. Demand is also high for energy-efficient and sustainable buildings.

The rapid acceleration in financing costs from mid-2022 destabilized pricing in the market, resulting in investment plummeting by Q4 as buyers and sellers pulled back.

Growth remains finely balanced against recession. Inflation barely slowed in February.

There is resemblance of calm after the storm for the European economy and real estate markets. Following significant repricing in 2022, we expect a smaller scale adjustment in yields this year. moreover, the relative position of the different sectors remains in flux.

Investment regained momentum over 2021 after the Covid-19 crisis to reach pre-crisis levels as economies reopened with control of the pandemic outbreak. It reached a high of €315bn in Q2 2022, almost touching Q1 2020’s record (€315bn).