Geopolitical uncertainty shakes renewed confidence in real estate
The INREV Annual Conference 2025 in Berlin covered a lot of ground: global politics, defence spending, AI, technology innovation and even the potential long-term benefits of space exploration, alongside a sharp focus on European real estate markets.
Confidence had been gradually returning through late 2024 and into early 2025. Liquidity was improving across real assets, capital flows were strengthening, valuations had reset to more attractive levels, and deployment was beginning to accelerate with some notable deals starting to emerge.
However, recent geopolitical shocks have thrown markets back into uncertainty. One speaker captured the mood, noting they had re-written their presentation four times in two weeks. Bond pricing swung sharply. Investor decision-making froze. Real estate, like everything else, was reminded that certainty is a luxury and resilience is essential.
Fundamentals remain strong across most European real estate sectors
Despite the volatility, the underlying fundamentals remain strong. Residential strategies – spanning single-family rental, multi-family, co-living, student accommodation and affordable housing – continue to attract allocations, reflecting structural demand drivers across Europe. Logistics and healthcare assets also remain firmly in favour, while alternatives such as data centres, life sciences and cold storage are drawing increasing investor focus, albeit with high barriers to entry.
There is also renewed selective interest in retail, hotels and leisure. Offices, however, remain highly polarised, with only certain best-in-class strategies attracting meaningful investor attention.
There were also some early signs of investor sentiment being re-directed from the US to Europe, with one capital raiser remarking that they had been approached by Canadian pension funds and another indicating a renewed interest from the US in the Nordics “for the first time in years.”
Operational complexity reshaping the real estate sector
In most asset classes the increasing operational element is key to success. Strong governance, expert professional support and clear fund structures are fundamental to managing risk and scaling operational performance – areas where Langham Hall continues to provide leadership across private fund services.
UK real estate outlook: innovation in adversity
For the UK, in particular, there was cautious optimism. Innovation in adversity was a recurring theme, with the introduction of the Reserved Investor Fund (RIF) structure – offering a more competitive, tax-transparent UK vehicle – well received. At the same time, stabilising inflation, expected rate reductions and the structural strengths of London’s financial ecosystem point to a more competitive UK fund landscape over the next cycle. In a market where agility and governance will define success, the UK is positioning itself to win a larger share of future capital flows.
Positioning for long-term resilience
Resilience is no longer just about enduring cycles; it is about positioning for advantage when others pause. Those prepared to move first will define the next chapter.
