Investment
Investment market
Investments in property, which fell sharply in 2023 and 2024, are slowly beginning to recover, but investors are only returning gradually and with a very safety-oriented approach.
Investors are currently still struggling with the difficult financing conditions in particular. The cuts in key interest rates have not yet been reflected in the terms of mortgage financing and have instead been reflected in increased risk margins. At the same time, the industry expects the wave of developer insolvencies to continue into the autumn. Construction starts are
still rare and the pipeline of new properties coming onto the market is poorly filled, meaning that slight price increases can be expected again in the medium term due to the future low supply. Properties that generate a sustainable, secure cash flow are currently in demand, although at lower prices. Vacancies or short lease terms, on the other hand, result in a
disproportionately high price discount and significantly lower buyer interest.
The sustainability of property continues to be an omnipresent topic. ESG-compliant new builds are less affected by the distortions. They are experiencing lower price adjustments as they fulfil the current sustainability requirements of the European union. Older existing properties, on the
Prime yields on office properties in European comparison (in %)
8 %
8.0
7.0
6 %
6.25
5.75
5.5
5.0
4 %
4.5
4.4
4.25
4.25
4.2
4.0
4.0
2 %
0 %
Source: EHL Market Research | BNP Paribas Real Estate | Q1 2025
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Office Market Report
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