At a glance
- The survey of 1,498 professionals also found 42% anticipating an improvement in the broader business environment, compared with 45% a year earlier.
- Allocation intentions are net positive: 47% of respondents expect allocations to European real estate to increase over the next two years, 38% expect them to hold stable and 15% expect a decrease, the report found.
- Regulatory uncertainty ranked among the top three concerns for 38% of respondents, and 41% identified national political instability as a growing concern, IREI reported.
45% of real estate professionals expect European business profitability to improve in 2027, down from 50% in the previous year's survey, according to the PwC and Urban Land Institute's Emerging Trends in Real Estate Europe 2027 report.
The survey of 1,498 professionals also found 42% anticipating an improvement in the broader business environment, compared with 45% a year earlier. IREI reported that Europe's commercial real estate recovery is expected to take longer than previously anticipated, with geopolitical uncertainty, elevated borrowing costs and regulatory pressure weighing on investor confidence. The profit reading still leads the business-environment reading by three percentage points.
Allocation intentions are net positive: 47% of respondents expect allocations to European real estate to increase over the next two years, 38% expect them to hold stable and 15% expect a decrease, the report found. Institutional investors remain selective about deploying capital, while family offices and other private capital sources play a growing role, according to the report. That suggests a larger share of new European commitments will come through private balance sheets than through scheduled institutional allocation cycles.
Regulatory uncertainty ranked among the top three concerns for 38% of respondents, and 41% identified national political instability as a growing concern, IREI reported. Higher bond yields, construction costs and energy prices are also complicating investment decisions.
London retained its position as Europe's leading city for real estate, according to the report.
Nearly half expect to raise European allocations
Share of 1,498 surveyed real estate professionals by two-year allocation outlook, %
- Increase47%47%
- Unchanged38%38%
- Decrease15%15%
Show as table
| Part | Value | Share |
|---|---|---|
| Increase | 47% | 47% |
| Unchanged | 38% | 38% |
| Decrease | 15% | 15% |
Reported by the Sectors desk from IREI. Published . Corrections