The European investment market has slowed down. Capital is shifting toward domestic and the most liquid opportunities

The volume of investment in commercial real estate in Europe reached €36.4 billion in the first quarter of 2026, down 7% year-over-year and 16% below the five-year average. The slow recovery of the past two years lost momentum in the first quarter.

All major asset classes weakened: office investments fell to 8.8 billion euros (-13%), industrial and logistics to 7.5 billion euros (-21%), retail to 8.5 billion euros (-9%), and hotels to 4.7 billion euros (-10%). Only one segment bucked the trend— alternative assets (healthcare facilities, data centers, senior housing), with a volume of 6.7 billion euros and growth of 46%. For the first time, it surpassed the hotel sector and became the quarter’s top-performing segment.

The market was dominated by domestic capital, accounting for about 60% of the total. The only growing foreign source was European cross-border capital (€7.2 billion, +13%); non-European investors remained cautious—volumes from the Middle East fell by 78%, and from the APAC region by 54%.

Among countries, Germany performed well (+16%) and, in particular, Spain (+80%, over 4 billion euros). Poland exceeded 1 billion euros, roughly 20% above the five-year average — one of the few markets showing significant growth. In contrast, the United Kingdom (-19%) and France (-37%) saw the sharpest declines.

“The first quarter showed just how sensitive the market is to geopolitics. A wave of uncertainty and rising government bond yields once again froze liquidity and widened the gap between buyers’ and sellers’ price expectations. However, this is not a reversal toward a downturn—rather, it is a wait for clearer signals.” — Jakub Holec, CEO, 108 Real Estate.

Data source: BNP Paribas Real Estate, Q1 2026.