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The Europe - Commercial Real Estate Market size is estimated to grow at a CAGR of 6.08% between 2023 and 2028. The market size is forecast to increase by USD 94.59 billion. The growth of the market depends on several factors such as growing aggregate private investment, a boost in e-commerce spending and a growing commercial sector in Europe.
The report includes a comprehensive outlook on the Europe - Commercial Real Estate Market offering forecasts for the industry segmented by Type, which comprises rental, lease, and sales. Additionally, it categorizes End-user into offices, retail, leisure, and industrial and others. The report provides market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing aggregate private investment is notably driving the market growth. Aggregate private investment is a kind of investment done by individuals and businesses on physical assets such as land, commercial buildings, and commercial offices. Investment in the commercial sectors, such as land, offices, and other physical structures, makes up most aggregate private investment. Most business investment is made in equipment and software, with the remaining spent on physical structures used for commercial purposes, such as buildings, land, and commercial offices. The growing investment by industries tends to boost the demand for commercial real estate consulting services, which helps investors strategize and plan their investments.
Furthermore, it helps in understanding what aspects of their businesses are most profitable and where investment should be focused. Thus, with growing industrialization, the aggregate private investment in the commercial sector is expected to grow significantly, which is expected to drive the growth of the market during the forecast period.
An increase in the construction of green commercial spaces is an emerging trend shaping the market growth. The construction, establishment, and subsequent services of a building consume substantial amounts of energy. As per the International Energy Agency (IEA), commercial buildings consume approximately 40% of the global energy consumption. It is expensive to generate the quantity of energy required for regular operations in a commercial space. Moreover, commercial buildings emit the maximum quantity of greenhouse gasses, which exceed the emissions from the transportation sector. Buildings continuously consume energy from the surroundings without any replenishment.
Moreover, green commercial buildings have introduced a new dawn in the construction industry with a new blueprint. In addition, the by-products released into the environment from the buildings are recycled. Thus, such green buildings help conserve energy while operating efficiently which also has a postive impact on Europe - commercial real estate market growth. Therefore, the increase in the construction of green commercial spaces will drive the growth of the market during the forecast period.
Increasing interest rates is a significant challenge hindering market growth. As rising interest rates put tenants under pressure, some of the biggest lending institutions in Europe are dealing with an increase in defaults on commercial real estate loans. While the demand for space in many commercial properties is anticipated to wane as economies slow down, this could potentially lead to a decline in rents. The recent sharp increase in interest rates across Europe is raising the cost of debt servicing for landlords. Although investors baulk at more expensive debt financing, which makes returns from real estate investments less alluring, higher rates are also having an impact on property valuations.
Moreover, a significant enough decline in commercial property values would also violate the debt covenants that banks include in landlord loans, which might lead lenders to seize troubled properties and also restrict Europe - commercial real estate market growth. Thus, such factors are expected to impede the market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Europe Commercial Real Estate Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Blackstone Inc. - The company offers commercial real estate through its subsidiary AG Real Estate which includes offices, industrial units, rentals, and retail.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The rental segment is estimated to witness significant growth during the forecast period. The rental segment holds the largest share of the Europe - commercial real estate market in 2023. The commercial rental agreement involves renting a property for commercial purposes such as renting a store, an office, an industry or other commercial structures. In the third quarter of 2022, office rental growth in Europe accelerated to 1.8% quarter-on-quarter
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The rental segment was the largest and was valued at USD 104.85 billion in 2018. In 2022, the European multifamily market is expected to continue expanding both in terms of volume and as a percentage of the overall investment market because it is resilient, which will lead to the growth of the market. Due to a lack of existing products, investors are anticipated to be more inclined to make forward-funding purchases and mergers and acquisitions, which will probably lead to larger deal sizes in both mature and developing markets. It is also anticipated that secondary markets and single-family rentals in established cities will continue to grow. Regulation will still be a barrier, particularly to rental growth, but strong tenant demand and a generally positive outlook for the industry will likely outweigh these limitations. These factors are expected to drive the growth of the market during the forecast period.
The Europe commercial real estate market report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Europe Commercial Real Estate Market Scope |
|
Report Coverage |
Details |
Page number |
153 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.08% |
Market Growth 2024-2028 |
USD 94.59 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.55 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Blackstone Inc., BNP Paribas SA, Covivio, CPI Property Group, Cushman and Wakefield Plc, Fastighets AB Balder, Futureal Management Szolgaltato Kft, HB Reavis Group, Hines, Jones Lang LaSalle Inc., LEG Immobilien SE, Mitsubishi Estate Co. Ltd., Savills, Segro Plc, Skanska AB, STRABAG SE, Vonovia SE, Aroundtown SA, Tishman Speyer, and Ageas SA |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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