The European commercial property market continues to offer attractive investment opportunities, according to the latest European Investment Atlas report from Cushman & Wakefield.
Despite the challenging macroeconomic environment, the Fair Value Index, which analyses the relative price of 119 prime markets in the office, retail and logistics segments, remains at historically high levels, standing at 91 points.
The analysis reveals that 82 per cent of the markets are currently undervalued, which reinforces the existence of a wide range of opportunities for investors. This scenario reflects an unusual balance between competitive prices and solid market fundamentals, creating a particularly favourable context for capital inflows.
The European prime property market continues to be in a transitional phase, evidenced by the stability of both the Fair Value Index and the TIME scores. This stability reflects a market that is no longer deteriorating, but has not yet entered a full recovery phase, thus offering a strategic entry point for investors.
The current cycle is defined not by the scarcity of capital, but by its strategic allocation. The debt environment remains liquid, with lenders offering increasingly flexible and innovative structures. Loan-to-value (LTV) ratios are rising, and debt funds (often backed by institutional capital) are expanding their presence in Europe.
Cushman & Wakefield's TIME score remained in the "inflection" phase for the second quarter running. This suggests that the market has passed its lowest point, but has not yet entered a clear recovery phase. The consistency of the score reinforces that conditions are stabilising, with early signs of new dynamism expected in the second half of 2025.
Future prospects
"We never tire of showing investors that the current moment is a unique opportunity to enter an undervalued market, but with solid fundamentals to realise very interesting returns," said David Lopes, Head of Capital Markets at Cushman & Wakefield Portugal.
As interest rates continue to fall and inflation moderates, investor confidence is expected to strengthen. Greater clarity is also anticipated in relation to US politics, which has increased global uncertainty, which should further boost confidence towards the end of the year.
The combination of undervalued assets, improving financial conditions and resilient sector fundamentals positions European property for a potential recovery in the second half of 2025.
Cushman & Wakefield therefore predicts that investors who act with discipline and strategic vision could be well placed to benefit from the next phase of the cycle.
