Published by Global Banking & Finance Review®
Posted on January 30, 2025
2 min readLast updated: January 27, 2026
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European office sales fell to their lowest since 2009, with 42.4 billion euros in transactions. Broader commercial property sales rose slightly due to industrial and hotel demand.
By Iain Withers
LONDON (Reuters) - Sales of office buildings in Europe last year slumped to their lowest level since the aftermath of the global financial crisis in 2009, even as the region's broader commercial property market showed signs of recovery, data showed on Thursday.
The commercial real estate market globally has endured tough trading since the COVID-19 pandemic, largely driven by higher borrowing costs and changing working patterns, the latter hitting offices particularly hard.
Last year 42.4 billion euros ($44.1 billion) worth of office properties changed hands in Europe, down 10% on the prior year and representing the lowest volume in 15 years, according to data from MSCI.
Sales of offices remain in the doldrums in Europe, with few larger deals and those put on the market - such as London's CityPoint and 'Can of Ham' towers - struggling to find buyers. Agents say only newer, greener offices remain in high demand.
However, after two years of contraction, deal volumes for Europe's wider commercial property sector turned positive in 2024 due to increased sales of industrial buildings, apartments and hotels, the MSCI data showed.
Across the overall sector, 188.8 billion euros worth of properties were sold, up 4% on the prior year, although this was still the second-lowest total in 12 years.
Tom Leahy, Head of EMEA Real Assets Research at MSCI, said real estate prices and Europe's broader growth prospects were still susceptible to ructions in bond markets, amid broader financial market volatility since Donald Trump began his second term as U.S. president.
"Certainly there are pockets of positive news which give grounds for optimism," Leahy said of the real estate market. "(However) the recovery is not happening everywhere and neither is it happening all at once."
Real estate investors in Europe rank residential, industrial and student accommodation as their top three investment preferences for this year, ahead of offices, a survey by trade body INREV published earlier this month found.
($1 = 0.9613 euros)
(Reporting by Iain Withers; Editing by Tommy Reggiori Wilkes, Kirsten Donovan)
Last year, 42.4 billion euros ($44.1 billion) worth of office properties changed hands in Europe, down 10% on the prior year.
The commercial real estate market has endured tough trading due to higher borrowing costs and changing working patterns since the COVID-19 pandemic.
Real estate investors in Europe rank residential, industrial, and student accommodation as their top three investment preferences for this year, ahead of offices.
In 2024, deal volumes for Europe's wider commercial property sector turned positive due to increased sales of industrial buildings, apartments, and hotels.
Real estate prices and Europe's broader growth prospects remain susceptible to fluctuations in bond markets, indicating a cautious outlook.
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