Institutional Real Estate Europe

February 1, 2026: Vol. 20, Number 2

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From the Current Issue

Europe

Intelligent evolution: Understanding the nuances of the data centre sector in the new era of AI

Data centres remain relatively new for many institutional investors, with most portfolios still underweight in the sector. The growing spotlight on the sector, however, is clearly justified. The segment has delivered strong performance in both public and private markets, driven by stable, long-term cashflows and robust growth from cloud adoption, AI and broader digital trends. The long-term growth prospect remains strong, but the sector also faces new considerations.

Europe

Chained up: Nonperforming real estate loans remain on the rise in Europe, with extrication looking more difficult than ever

Nonperforming loans are on the rise. Figures released by the European Banking Authority (EBA) in December 2025 showed the volume of nonperforming loans in the European Union to be €373 billion, amounting to 1.8 percent of all bank loans. This was an increase from the €357 billion registered at the end of 2024. In the United Kingdom, the percentage of bad loans had crept up to more than 1 percent by the end of 2024 and is not expected to drop anytime soon.

Europe

The agentic frontier: How artificial intelligence is transforming real estate

Artificial intelligence (AI) is no longer a distant promise for the real estate sector — it is rapidly becoming the backbone of innovation, efficiency and strategic decision making. From valuation and investment to sustainability and governance, AI is reshaping how professionals, investors and organisations engage with property markets.

Europe

The money talks: The most important issues discussed at the Institutional Real Estate regional 2025 Editorial Advisory Board meetings

During the past few months, investors, managers and consultants participated in Editorial Advisory Board meetings for each of Institutional Real Estate, Inc’s regional publications, to discuss the most pressing issues facing the real estate investment industry. The editorial board of Institutional Real Estate Americas met in San Diego on 9–11 September; the editorial board of Institutional Real Estate Europe met in Amsterdam on 17–19 September; and the editorial board of Institutional Real Estate Asia Pacific met in Kyoto, Japan, on 21–23 October. Below, editors Andrea Zander, Marek Handzel and Jennifer Molloy discuss highlights from the regional events.

Europe

Echoes of 1929: As George Santayana warned, those who cannot remember the past are condemned to repeat it

As attendees of the Fall PREA Conference recently gathered to hear Andrew Ross Sorkin speak — and received copies of his book 1929: Inside the Greatest Crash in Wall Street History — the timing could not have been more prescient. Sorkin’s reflections on the speculative mania, regulatory gaps and economic fragility that preceded the Great Crash of 1929 offer more than historical insight — they serve as a mirror to the present moment.

Europe

European deals expected to reach €77b in Q4 2025

European real estate investment volumes are expected to reach some €77 billion in the fourth quarter of 2025, a 12 percent year-over-year increase, says Savills. Should the advisory firm’s initial estimations prove to be correct, then the total volume for 2025 will amount to €215 billion, which would be 9 percent higher than the total recorded in 2024.

Europe

Shopping centres boost footfall with wellness occupiers

Shopping centre owners aiming to boost footfall should commit to attracting providers of fitness, healthcare and wellness into their properties. CBRE says there is a growing need for community-based healthcare space across Europe and shopping centres are one of the best locations for such facilities. The advisory firm’s European Shopping Centres Performance Index shows shopping centres with fitness, healthcare and wellness (FHW) tenants have seen stronger footfall recovery than those without such occupiers.

Europe

More help needed to increase sustainable real estate

With demand for sustainable real estate cooling in most regions, more help is needed to prove that the current cost of making properties “greener” is worth the expenditure. A report released in November 2025 by The Royal Institution of Chartered Surveyors (RICS) showed many green projects are stalling due to high upfront costs and uncertain payback, while globally, there is a growing number of construction companies who do not measure carbon emissions on their projects.

Europe

Chinese competition to further destabilise industrial sector

Competition from China could further destabilise the European industrial real estate sector. In a paper on the sector released in December 2025, Oxford Economics has warned China is competing with Europe in an increasing number of more valuable areas, such as electric vehicles, renewable tech, to advanced machinery, which is displacing European producers at a higher rate than ever before. This, says the data analysis firm, presents an existential threat to European industry, particularly in Germany. Since 2020, imports from China have grown at a double-digit rate annually, but exports from the European Union to China have continued to fall.

Europe

Tech companies radically rethink their real estate plans

Tech companies are having to radically rethink their real estate plans as their industry undergoes unprecedented change. In its 2026 Technology Real Estate Trends to Watch report, JLL says tech leaders are having to deal with a convergence of major trends — such as artificial intelligence (AI) supremacy races, workforce uncertainty and new infrastructure demands — which have left them at an inflection point.

Europe

Truck parking to be the next growth story in open storage

As the industrial open storage sector continues to grow in Europe, one of its subsectors — truck parking — is catching the eye of investors. A segment that further demonstrates the growing blurring between real estate and infrastructure, the emergence of safe and secure truck parking fulfils a yawning gap in Europe’s logistics ecosystem. Michael Abel, founder and CEO of GREYKITE, which last year made its first investment in the subsector, says it has great potential given demand for truck parking and the success of the segment in the United States.

Europe

A tepid affair: The implications of the November 2025 UK budget

In November 2025, the UK government decided to raise taxes by £26 billion (€30 billion) to primarily increase its future fiscal buffer against further shocks and to fund increased spending in a number of areas. Within these tax changes, there were some that will directly impact the real estate market.

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