The recovery in Europe’s commercial real estate market stalled in the first three months of 2025 as investor sentiment was shaken by rising borrowing costs amid mounting economic and geopolitical uncertainty, MSCI’s latest quarterly Europe Capital Trends report showed. Global bond markets, which serve as a benchmark for real estate pricing, had a volatile quarter as the new Trump administration began reshaping global economic frameworks.
Transactions completed in the first quarter totaled €41.0 billion ($46.4 billion), the report showed. This represented an 11 percent decline from the same period a year earlier, led by weaker U.K. and French markets. The negative quarter contrasted with the investment market’s positive momentum since first quarter 2024. During the 12 months to March 31, transaction volumes rose by 17 percent to €213.9 billion ($241.9 billion).
“Uncertainty over trade tariffs, the economy and geopolitics, amplified by the unpredict
