In a landscape of caution and opportunity, where should discerning investors look?

The European real estate market enters 2025 marked by a paradox: underlying demand remains robust, yet the pace of capital deployment has slowed. Rising interest rates, inflationary pressures, and geopolitical tensions have reshaped investor sentiment. But beneath the surface, key sectors continue to present compelling long-term value.

1. Logistics & Industrial: Still the Darling of Smart Money

Demand for logistics hubs and last-mile delivery infrastructure remains resilient, driven by e-commerce growth and supply chain recalibrations. Prime assets in markets like Germany, the Netherlands, and Poland are seeing sustained interest, albeit with sharper due diligence on pricing and yield expectations.

2. Urban Regeneration: The Quiet Driver of Future Value

Urban revitalisation projects — think mixed-use developments and sustainable living hubs — are increasingly attractive. Investors are aligning with cities’ green transition goals, tapping into regeneration initiatives that offer both social impact and attractive risk-adjusted returns.

3. A Shift to Value-Add & Opportunistic Plays

Gone are the days of passive capital inflows. Investors now seek value creation through active asset management: repositioning underperforming assets, enhancing energy efficiency, and leveraging digital property technologies. Opportunistic funds are eyeing distressed yet fundamentally sound properties.

4. Capital is Cautious, but Not Absent

While core assets in Tier 1 cities see yield compression, mid-cap properties with solid fundamentals in secondary cities are gaining traction. Cross-border investors, especially from the Middle East and Asia, continue to view Europe as a safe haven — provided the investment thesis is defensible.

DNO’s Perspective: Discipline, Focus, and Sector Expertise

At DNO, we approach real estate with a long-term lens. Our strategy is not volume-driven but value-driven. We invest in assets where fundamentals align with megatrends — urbanisation, digital transformation, and sustainability. Each project is rigorously assessed for market fit, value-creation potential, and resilience to macroeconomic shifts.

In uncertain times, clarity of thesis wins.
Europe’s real estate landscape in 2025 is not for the short-sighted. But for investors with patience, precision, and partnership, it offers enduring opportunities.