We are entering a phase where investors can no longer rely solely on capital appreciation or yield compression; growth must be created through repositioning, active asset management and countercyclical strategies. The logistics sector continues to present a compelling investment opportunity, supported by an exciting, evolving and expanding occupier base; constrained supply; and low obsolescence.

Victor Haghani and James White’s essay “Extrapolators Beware the Money Pump,” published in their 2023 book The Missing Billionaires: A Guide to Better Financial Decisions, offers a compelling thought experiment that should give institutional investors pause. In it, the authors describe a fictional investor, Mr X, who allocates capital based solely on past returns. Two savvy traders exploit his behaviour through subtle price movements. Over time, Mr X loses nearly all his wealth — not through recklessness but by consistently following his own flawed logic.

As the festive season approaches, Britain’s high streets acquire a familiar burst of energy. Empty storefronts that have stood idle for much of the year are swiftly transformed into temporary retail spaces — concept stores, seasonal brands or experimental outlets testing their appeal. These “pop-up” shops have evolved from a niche novelty into a mainstream feature of the retail landscape.

The vacancy level gap between central and outlying office markets in Europe has grown again. BNP Paribas Real Estate says the average vacancy rate in European CBDs stood at 5.4 percent at the end of September 2025, up by 20 basis points during the third quarter of 2025 compared to the third quarter of 2024. In secondary markets, the gap is now at 10.9 percent, having grown by 80 basis points throughout the 12 months to September 2025. The overall average office vacancy rate in Europe stood at 9.3 percent.

Europe recorded the strongest retail rent growth across the globe for the third quarter of 2025. CBRE says strong competition for prime space across the region has pushed up rents and increased lease lengths. Europe’s rents increased by 3.8 percent year-over-year by the end of September 2025. Asia Pacific had the next highest increase at 1.4 percent, with Americas posting a 1.3 percent rise.

Commercial real estate financing has become more accessible as debt funds increase their activity and more banks provide back leverage. In its 2026 European Annual Outlook paper, AEW has said increased competition among banks and non-bank lenders is improving non-financial borrowing terms. Euro zone borrowing costs remained favourable and accretive to equity investors at 3.9 percent at the end of the third quarter of 2025, compared with the average prime cross-sector euro zone property yield at 5.1 percent.

INREV has launched a European living sector fund index, in response to the continual growth of investor exposure to residential real estate. The Living Fund index, which is the first of its kind, draws on 25 years of performance data from European residential and student housing funds. It covers a broad range of 12 living subindices, including residential, student housing, closed-end and open-end, as well as single country and a pan-European series.

In some real estate sectors, there is both proof of inflation linkage and a deep-seated structural undersupply, despite there being substantial demand. This is especially the case in the UK living sectors, where a lack of development activity is leading to even lower levels of much-needed new supply. This means that rents will continue to grow, and we anticipate that once gilt yields reduce and capital values start to increase, the cycle will turn, and real estate will once again attract greater investment.