According to data released, office building sales in Europe fell to their lowest level since the global financial crisis’ aftermath in 2009, despite signs of recovery in the region’s larger commercial real estate market.
The global commercial real estate market has experienced difficult trading due to the COVID-19 pandemic. This has been primarily caused by rising borrowing costs and shifting work schedules, with offices being particularly affected.
According to MSCI data, office property sales in Europe in 2024 totalled 42.4 billion euros (USD 44.1 billion), a 10% decrease from the previous year and the lowest volume in 15 years.
Office sales in the continent are still at an all-time low, with few larger deals and those that are listed for sale—like London’s CityPoint and “Can of Ham” towers—failing to attract buyers. According to agents, demand is still highest for newer, greener offices.
However, the MSCI data indicated that higher sales of hotels, apartments, and industrial buildings in 2024 caused deal volumes for Europe’s broader commercial real estate sector to turn positive after two years of contraction.
The total amount of properties sold in the sector was 188.8 billion euros, which was the second-lowest amount in 12 years but up 4% from the previous year.
According to Tom Leahy, Head of EMEA Real Assets Research at MSCI, amid broader financial market volatility since Donald Trump started his second term as US president, real estate prices and Europe’s overall growth prospects remain vulnerable to turbulence in bond markets.
“Certainly, there are pockets of positive news which give grounds for optimism. However, the recovery is not happening everywhere and neither is it happening all at once,” Leahy said of the real estate market.
According to a survey released by trade group INREV, the continent’s real estate investors have ranked residential, industrial, and student housing as their top three investment preferences for 2025, surpassing offices.