Real estate recovery is being led by debt capital, with lenders re-engaging in transactions, according to Cushman & Wakefield’s new European Investment Atlas, report.

LONDON, 28 November 2025 – Easing credit conditions, improving liquidity and clearer macro signals are creating a strategic window for investors, according to Cushman & Wakefield’s latest European Investment Atlas, with disciplined strategies uncovering compelling opportunities across sectors.

Lenders are using refinancing and restructuring to drive improving liquidity, gain market share and set new clearing prices, the new research finds, with clearer macro signals helping to create “a strategic window for investors”, C&W said.

Heightened competition is compressing margins across asset classes and risk profiles, while more flexible structures are enabling proven sponsors to secure capital and accelerate transactions.

C&W’s TIME Score, its proprietary cyclical positioning indicator, has risen to 3.2 in Q3 from 3.0 in Q1, reinforcing that the market is at a turning point and that recovery is broadening across sectors.

The report found that logistics, retail and hospitality are firmly in the investment “sweet spot”, supported by resilient operating metrics and strengthening demand. Prime ESG-aligned offices are holding rents and absorption, while secondary stock faces structural challenges, the firm said.

David Gingell, co-head of EMEA debt advisory at Cushman & Wakefield, said: “Debt capital is leading the recovery cycle by 12 to 18 months, with lenders intensifying competition, compressing margins and driving liquidity, positioning debt as the key enabler of European real estate transactions.”

The five-year SONIA remains materially below Q3 2024 levels and EURIBOR has stabilised, supporting accretive debt on most non-trophy assets.

Meanwhile, the firm’s Fair Value Index, shows that 78% of tracked markets are underpriced. No markets are fully priced, and valuation dispersion highlights selective yet plentiful opportunities for investors.

Logistics leads the opportunity set in terms of sectors, supported by resilient fundamentals, while Germany remains underpriced across all markets and sectors.

David Hutchings, Head of Investment Strategy, EMEA Capital Markets at Cushman & Wakefield, said: “The recovery is underway, and investors are adjusting strategies as confidence returns. Fundraising is rebounding, with managers pitching secure-income mandates and looking to increase their ability to be flexible through diversified multi-sector strategies.

He added: “Core capital is cautiously returning, focused on stock and location quality but with pricing discipline. This sentiment-led upswing is expected to strengthen through 2026, but with buyers remaining price-sensitive if yields compress too quickly.”

As bid-ask spreads narrow and liquidity improves, transaction volumes are set to rise.

C&W anticipates that selectivity and quality will drive outperformance, with investors focusing on core income, diversified strategies and prime ESG-aligned assets, while maintaining flexibility to adapt to shifting sector and geographic opportunities.