CBRE 2019 Market Outlook: European Real Estate Markets Continue To Build Momentum Despite Global Uncertainty

London, 11th December 2018 – The European property sector is expected to grow and bring new opportunities, despite continued downside risks, according to CBRE’s 2019 EMEA Market Outlook report.

CBRE expects economic growth in Europe will remain above-trend rate in 2019 and 2020, although recent indicators suggest some slowing of momentum. Spain, Ireland and the central European countries are expected to see the fastest economic growth, while France’s growth accelerates as recent economic reforms begin to pay off. However, UK growth is expected to remain below-trend, but with better long-term potential once the current uncertainty around Brexit passes.

CBRE also expects a strong investment market in 2019, though volumes may fall moderately due to an end to quantitative easing, caution about geopolitical risks and a lack of available stock in some countries.

Several sectors are expected to perform well and bring new opportunities for investors and occupiers in 2019. Industrial and logistics is set to be boosted by both economic growth and the ongoing expansion of e-commerce. For the residential sector, most major markets are expected to see robust growth in rents and capital values, with Germany and the Netherlands most prominent. In addition, the European data centres sector should extend its period of strong growth, fueled by an anticipated influx of new occupiers from Asia, particularly Chinese cloud and telco companies, as well as a further wave of demand from the US cloud companies. CBRE also expects the alternatives sector – student housing, retirement living, healthcare etc.- to expand as more investors pursue genuinely pan-European strategies in these markets.

Office markets around the region are expected to see positive growth in leasing levels in 2019. However, major European cities, including Paris, Berlin, Stockholm and London, are expected to see lower levels of employment growth in office-using sectors. Retail continues to adjust to far-reaching changes in consumer behaviour and more cautious investor sentiment, although assets that offer either experiential retail or convenient local amenities are better placed to withstand these changes.

Neil Blake, Global Head of Forecasting and Analytics at CBRE said:

“Despite ongoing macroeconomic and political uncertainty in many parts of the world, 2019 presents some exciting opportunities for real estate investors and occupiers, from tech and innovation to alternatives and data centres. While some sectors may see more subdued performance, reflecting concerns around the loss of economic momentum in parts of Europe, the overall picture remains relatively positive and we expect the European economy will continue to grow at an above-trend rate in 2019.”

CBRE’s Outlook assesses how the key economic, political, and technological forces will impact property markets in 2019 and beyond, taking a comprehensive sector-by-sector review of the property industry.

Outlook highlights


  • European economy still growing at an above-trend rate in 2019. Spain, Ireland and the Central European countries expected to see the fastest rates of growth over the next five years.

  • Below-trend growth in the UK to 2019 to 2020 but better longer-term potential

  • Potential cyclical economic slowdown unlikely until 2021.

Capital Markets

  • CBRE expects a strong investment market in 2019, but a moderate decline compared to 2018.

  • Main drivers are the end of quantitative easing, caution due to geopolitical risks and a lack of available stock for sale in some countries after several years of very high investment turnover.

  • Despite the end of quantitative easing, accumulated savings will keep interest rates low in the long-run.


  • Slower growth in leasing levels, but supply-side constraints will support positive real rental growth in most major office markets in 2019.

  • Acceleration of the “agile” space agenda, with occupier trends shifting demand towards tech-enabled high-amenity buildings.


  • Negative sentiment has overshadowed strong investment turnover, but investors are clearly being more selective in their choice of retail assets.

  • Assets that offer either experiential retail or convenient local amenities are areas of strength.

  • Growing uptake in food and beverage, leisure and local service providers.

  • Few markets expected to see rental growth in 2019.

Industrials and Logistics

  • The combination of economic growth and expansion of online sales should continue to boost logistics market performance in 2019.

  • Expect more rental growth, which will be highly concentrated in supply-constrained hubs.

  • Occupiers and investors will be focused on urban logistics opportunities, which will be provided by light industrial and other ‘infill’ warehousing property.

  • The emergence of online grocery and food sales will strengthen the need for specialised assets, such as temperature-controlled city depots and value-added services.


  • Robust growth expected in rents and capital values across most major markets, reflecting favourable credit conditions and strong investor demand.Germany and the Netherlands should see particularly strong growth.

  • Investment running ahead of 2017 levels, and we expect further advances in 2019. This will include new investor types being attracted into the sector, and expansion in the geographic spread of investment.

  • The sector remains an attractive asset class and will continue to be a growing focus for investors through 2019.


  • Growth in demand for overnight accommodation is expected to continue through 2019 as consumers increase expenditure on travel and experiences.

  • Hotel development is rising in some parts of Europe, mostly in the economy and midscale tiers of the market, but generally not to a level that would outpace demand growth. As a result, we expect hotel performance to improve over the next 12 months.

  • The rising level of institutional interest and investment appetite across a widening range of buyer types is expected to maintain positive pressure on yields and pricing.


  • Major institutional investors are now firmly committed to alternatives, and more investors will be pursuing genuinely pan-European and cross-sector strategies in 2019.

  • This will create new opportunities, as well as risks, including a clear understanding of new and evolving investment structures.

  • High level of corporate merger and acquisition activity in many sectors will continue. Since the property component of corporate transactions is now central to pricing, we see this expanding the range of opportunities for real estate investment.

Data Centres

  • The European data centres sector is in a period of strength, which CBRE expects to persist through 2019.

  • CBRE forecasts the four largest markets (Frankfurt, London, Amsterdam and Paris) will grow by 17% in 2019, which would make it the third consecutive year of growth above 15%. Growing competition between US and European providers will fuel expansion beyond traditional locations.

  • 2018 has been a record year for take-up, and we expect 2019 to be a further strong year. Heightened market activity leading to substantial investor interest and subsequent merger and acquisition (M&A) transactions.


  • 2019 will see advances in the understanding and deployment of real estate technology, with occupiers and investors taking a more focussed and issue-led approach to investing in tech innovation programmes.

  • Occupiers and investors alike will refine their tech and innovation strategies, securing the right skills or partners to deploy tech and innovation programmes at an asset-specific level

  • CBRE believes the five technologies that stand to be the biggest game changers – now and in the future – in delivering investor and occupier objectives are:

    • Big data and robotic process automation

    • AI and machine learning

    • Internet of things/smart buildings

    • Augmented reality/virtual reality

About CBRE

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 150 employees, we work with occupiers, investors and developers of office, industrial and logistics, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at www.cbre.ie