UK leads resurgence in European office investment

The U.K. is leading a recovery in Europe’s office real estate market, with £4.1 billion worth of office transactions in the first six months of 2024. This marks a significant increase compared to the five-year average and surpasses France and Germany. The U.K.’s early recovery is attributed to clarity from the general election and interest rate cuts. London is leading the rebound, with higher returns attracting investors. Other markets in Europe are expected to follow suit as interest rates fall. Concerns remain about office occupancy rates, with a divide between modern buildings in high demand and older properties. The shift towards green buildings is becoming important, with landlords able to charge a “green premium” for environmentally friendly properties. Overall, the future looks positive for the European office real estate market.