E
merging Opportunities in Europe’s Commercial Real Estate
September 29 2025 | 2 min read
Europe’s commercial real‑estate (CRE) market is large, liquid and increasingly diversified. After two years of correction driven by tighter monetary policy aimed at curbing high inflation, the market has steadied and is now entering a recovery phase. A new cycle has begun, with momentum expected to build over the next 12–18 months, buoyed by lower inflation, more accommodative policy, and rising spending on defence, infrastructure and sustainability projects.
Investors can find attractive entry points in Europe’s CRE. While the region’s dynamics differ from the U.S., pairing exposure to both markets can enhance diversification and returns. Key attributes of European CRE include:
* Strong historical performance and a positive outlook
* A large market with significant consolidation potential
* National variations that create targeted investment opportunities
* Secular growth in alternative property types
For deeper insights, read the full report here.
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Public distribution in the United States; institutional, professional, qualified or wholesale investor use only in other permitted jurisdictions as defined by local law.
**Risk Considerations**
Investing in real estate carries risks, including loss of principal. Past performance does not guarantee future results. Risks include market volatility, liquidity constraints, leverage, credit, occupancy, legal and regulatory factors, rising interest rates, refinancing pressures and defaults. International exposure adds currency, political and accounting risks.
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**Forward‑Looking Statements**
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* United States – Principal Global Investors, LLC (SEC‑registered).
* Europe – Principal Global Investors (Ireland) Limited (Central Bank of Ireland‑regulated). This material is for professional clients only.
* United Kingdom – Principal Global Investors (Europe) Limited (FCA‑regulated).
* Switzerland – Principal Global Investors (Switzerland) GmbH (marketing material).
* United Arab Emirates – Principal Investor Management (DIFC) Limited (Dubai‑regulated).
* Singapore – Principal Global Investors (Singapore) Limited (MAS‑regulated, institutional only).
* Australia – Principal Global Investors (Australia) Limited (ASIC‑regulated, wholesale clients only).
* Hong Kong – Principal Asset Management Company (Asia) Limited (SFC‑regulated, professional investors only).
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