Emerging Trends in Real Estate®: Europe 2024

etre europe 2024
  • Report
  • 15 minute read
  • November 08, 2023

Real estate leaders reflect on uncertainty, the outlook for offices and the effect of ESG on balancing profit with the future needs of a fast-changing society.

This report is a joint survey by PwC and the Urban Land Institute. Now in its 21st edition, the survey provides an outlook on real estate throughout Europe for 2024 and beyond. Industry leaders continue to weather the geopolitical storm, with the added burden of inflationary pressures. 

While interest rates, inflation and European economic growth remain the chief worries for the industry over a five-year horizon, the survey respondents expect more clarity on these matters will facilitate greater transaction activity in 2024. However, there is unlikely to be a single timeline for this across Europe’s diverse markets. This year a third of the respondents expect business confidence and profitability to increase, providing room for cautious optimism.

Sectors to watch include those that offer the promise of recession-proof stability. The top six in our rankings table are again dominated by niche, operational asset classes that are acknowledged as being underpinned by global megatrends—decarbonisation and energy transition, information technology, demographics and urbanisation.

Elsewhere, an AI shakeup is well on its way and construction costs continue to blight the real estate sector. There is general agreement that occupiers (and therefore real estate investors) are prioritising quality space that helps companies adapt to the latest working practices as well as long-term sustainability.


predict ESG matters will have the biggest impact on real estate by 2050


believe that current valuations “do not accurately reflect all the challenges and opportunities


believe marketing and leasing have some of the greatest potential applications for Artificial Intelligence (AI)

ESG becomes a “licence to play”

The importance of environmental, social and governance (ESG) matters in the real estate industry continues to grow. While the economics of decarbonisation—high construction costs and labour shortages—are causing headaches for investors, interviews suggest that more in the industry now understand the value that ESG investment adds, rather than the cost it entails.

There is strong agreement about the importance of ESG credentials to future real estate capital values. Not only is retrofitting or repurposing buildings seen as a good way to secure a high-quality product, it plays into the trend of increasing reticence amongst investors to new development. Some 62% of respondents agree that retrofitting or repurposing is the best route to acquire prime products, against 43% in favour of new development.

“ESG compliance is not a ‘nice-to-have’. It’s a licence to play,” says the CEO of a pan-European property company. “The personal opinion of the developer is irrelevant if investors, regulators, banks and everyone else thinks it's important.”

The cautious outlook in this year’s Emerging Trends in Real Estate® Europe report reflects an industry still coming to terms with hugely challenging economic circumstances after a decade of cheap debt which drove deals and globalisation trends that enabled construction, followed by monetary policies that papered over the cracks caused by the pandemic.“The watch words on our side are discipline and patience. There is just no value in rushing this,” says one senior executive at a European institutional investment firm.

Emerging Trends in Real Estate® Europe 2024 reflects the views of 1,090 property professionals who completed surveys, interviews or took part in a series of roundtable meetings between July and September 2023 as part of the research for this report.

Cities to watch

Across Europe, industry leaders point to economic performance as the most important consideration in choosing a city for investment or development, closely followed by transport connectivity.

Those cities attracting the most capital tend to be near the top of the Emerging Trends Europe ranking, in part due to the survey methodology. But over recent years there has been a discernible rise among “tier one” cities: national capitals and economic hubs. This could be evidence of a desire for greater liquidity and stability in riskier times, with the likes of Milan, Lisbon and Brussels making significant climbs.

London’s top position for the third successive year confirms the premium investors place on liquidity. There is also a sense that its market fundamentals remain resilient, with one REIT CEO noting that “direct investors, sovereign wealth, pension funds and foreign capital still believe in the long-term benefits, wealth preservation and income that London can provide”.

Paris performs strongly due to similar sentiments, securing second place once more with the Olympics effect evidently outweighing any negativity surrounding recent protests on the street while also reinforcing its position as the world's favourite tourist destination, according to the World Travel and Tourism Council.

Like the other German cities in the survey, Berlin has slipped down the table this year, moving from third to fourth. This partly reflects the gloomy growth forecast for the national economy in 2023 and the relatively weak rebound expected in 2024, while some suggest that real estate pricing and valuations have adjusted slower here than across most of Europe.




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Meeting the future needs of real estate today

Demographic change, digitisation and decarbonisation are now at the forefront of investor minds when making investment decisions. Real estate is being seen by its stakeholder network as “social infrastructure”. It is an industry that is not just “creating a lease so we can collect the rent,” as one investor says, but investing in the space required to meet the most fundamental needs of society.

The traditional property sectors are also responding to societal needs, through a renewed focus on social infrastructure. Logistics serves the supply chains that keep the modern economies functioning and can help decarbonise the transportation industry. Retail and leisure schemes provide the spaces where we gather and interact in an increasingly digital world. The office sector is the setting for the knowledge economy, central to the success of cities across Europe.

Contact us

Sebastian Zollinger

Director, Head Real Estate Advisory, Zurich , PwC Switzerland

+41 58 792 28 87


Raffael Simone

Assurance Partner, PwC Switzerland

+41 58 792 23 82