Europe office sales plummet in first quarter

European commercial real estate investment fell to its lowest in 11 years in the first quarter of 2023, according to MSCI Real Assets, as investors spooked by higher interest rates and the economic outlook put acquisition plans on ice.

The number of offices sold — Europe’s largest real estate sector — fell to its lowest on record, while the volume of transactions slumped to a 13-year low of €10.8 billion ($11.94 billion).

The United Kingdom kept its top spot as Europe’s largest commercial real estate market, but Paris overtook London to become the region’s most active investment destination, with the three largest European property deals of the first quarter all taking place in the French capital.

“While there are obvious concerns about the availability of real estate finance following the banking turmoil in March, we’ve yet to see a widespread increase in distressed sales,” said Tom Leahy, MSCI’s head of real assets research for Europe, the