82% of European Real Estate Markets Are Undervalued, Cushman & Wakefield Reports
A comprehensive analysis by Cushman & Wakefield (C&W) indicates that a significant majority of European commercial real estate markets are currently undervalued, signaling strategic entry opportunities for investors. The firm's latest “European Investment Atlas” report reveals that 82% of the 119 prime office, retail, and logistics markets surveyed across Europe present attractive value propositions. This finding comes amid persistent macroeconomic uncertainty, yet the report points to a rare alignment of favorable pricing and solid investment fundamentals. The study's Fair Value Index, a key metric that assesses the relative pricing of markets, stands at a high of 91 points. This figure underscores the breadth of opportunities available for capital deployment. The European prime real estate market is described as being in a transitional phase. According to C&W's TIME index, which identifies cyclical turning points, the market has moved past its lowest point but has not yet embarked on a full recovery. This stability suggests a market that is no longer in deterioration, offering a strategic window for investment before the next growth cycle begins. The report details that the Fair Value Index experienced only a marginal dip from 92 to 91 in the first quarter of 2025. While rising government bond yields exerted some pressure, this was offset by resilient risk premiums and recalibrated return expectations. These factors are combining to create a favorable environment for long-term capital allocation and strategic re-entry into the market. The current cycle is characterized not by a lack of capital, but by its careful and strategic allocation, with a liquid debt environment and lenders providing increasingly flexible financing structures. For the second consecutive quarter, the TIME score remained in an “inflection” phase, reinforcing the view that market conditions are stabilizing. The report anticipates that initial signs of new momentum will emerge in the second half of 2025. David Lopes, head of capital markets at Cushman & Wakefield Portugal, commented on the findings, stating, “We never tire of showing investors that the current moment is a unique opportunity to enter an undervalued market, but with solid fundamentals to vir to realize very interesting returns.” Investor confidence is expected to be further bolstered by moderating inflation and declining interest rates. Additionally, greater clarity on U.S. policy towards the end of the year is predicted to reduce global uncertainty, further strengthening market sentiment. The combination of undervalued assets, improving financial conditions, and resilient sector fundamentals positions European real estate for a potential recovery in the latter half of 2025. Cushman & Wakefield concludes that investors who act with discipline and strategic foresight will be well-positioned to benefit from the upcoming market cycle. Stay informed on Lisbon property market developments at realestate-lisbon.com.
