Despite a contraction in CRE deal volume in 3Q, the article notes emerging “green shoots” of recovery, suggesting that selective activity and improving market sentiment may signal a nascent rebound in European CRE markets.
MSCI Real Capital Analytics’ latest release on European commercial real estate (CRE) volumes showed that the market is still finding its footing. Transaction activity fell -3% year-over-year in Q3 2025 to €45.6 billion, below the €50.7 billion quarterly average of the first half. Year-to-date, volumes were flat at €146.9 billion, a clear contrast to the U.S., where deal activity has rebounded sharply and is up +17% over the same period.
The disconnect is unusual. Historically, CRE transaction volumes in the U.S. and Europe have moved in tandem, and when gaps emerge, they tend to normalize quickly. Signs are now emerging that Europe may be on the cusp of doing just that. The number of European transactions under contract in October reached its highest level since 2022, and the Q3 2025 INREV Consensus Survey showed a meaningful rebound in investor sentiment, driven by improved financing conditions and increasing market liquidity.
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