AEW has released its 2026 European Annual Outlook. The report highlights the recovery in European real estate, noting the return of liquidity to the market and the tightening of prime yields. AEW’s best-case scenario projects that prime real estate returns for 2026-2030 across all 20 countries in its European coverage will average 8.4 percent per year. While European Gross Domestic Product (GDP) growth has recovered, it remains modest at 1.7 percent per year and is unchanged from AEW’s March 2025 forecast.
“The European real estate sector continues to show signs of recovery, with prime property yields projected to tighten slightly by 30bps over the next five years, despite forecasts indicating that bond yields will widen due to ongoing macro-economic pressures,” said Hans Vrensen, head of research and strategy Europe at AEW. “While the impact of global tariffs is now expected to be less negative than initially feared, the European economy still faces chal
