MSCI Real Assets: European commercial real estate investment falls for seventh consecutive quarter in Q1

European commercial real estate investment fell for the seventh consecutive quarter in the first three months of 2024 as many buyers and sellers remained unwilling to transact given the uncertainties over pricing, according to the latest Europe Capital Trends report from MSCI Real Assets.

The volume of completed transactions in the first quarter declined 26 percent from a year earlier to €34.5 billion ($36.9 billion), the lowest level since 2011, the quarterly report showed.

Expectations that the European Central Bank might start to cut interest rates in the spring proved too optimistic, as five-year swap rates continued to move out through the first three months on the year, affecting debt costs for commercial real estate. Meanwhile, pricing in many market segments has not fully adjusted to reflect the higher interest-rate environment and subdued economic growth. Combined, these factors deterred prospective buyers and persuaded many property owners to de