2025 is shaping up to be a strong year for European property investment, driven by a scarcity of operating capital. This was the main conclusion on the global outlook for real estate presented by experts at a session held in London as part of the international roadshow for The District 2025—one of Europe’s leading real estate events from a capital markets perspective, taking place in Barcelona from September 30 to October 2.
Paul Brennan, Partner and Co-Head of Real Estate at King Street Capital Management, noted that “in 2025, we are seeing fewer groups with available capital. This means those who do have capital can be highly selective, acquiring better assets, with higher returns, stronger structures, and more solid sponsors.” Similarly, Maria Terzini, Principal at TPG, confirmed that “this is the time to invest, as competition has decreased and there is less liquidity per deal, which creates good opportunities.”
Given this context, both executives agreed on the “surgical” approach funds are taking today— “choosing specific assets in specific markets to avoid value traps,” as Brennan put it. Among capital groups, sovereign funds stand out as the most robust, according to the leaders of TPG and King Street. These funds possess significant resources and invest with a long-term perspective. “According to industry studies, the largest Singaporean sovereign fund has accounted for around 5 percent of all European real estate activity over the past three years,” Brennan illustrated.
Europe gains ground
Historically, Southern Europe has been perceived as a less attractive region for capital, often experiencing periods of economic stagnation. However, this perception is changing. “The best results are now being seen in Europe’s peripheral countries: Spain, Portugal, Italy, and Greece,” explained the King Street executive. Terzini echoed this sentiment, adding that “when we compare GDP growth in Southern Europe with countries like Germany, we often see better numbers. Spain stands out with one of the highest growth rates, thanks to strong domestic consumption, demographic expansion, proactive public policies, and generally more attractive margins compared to more mature markets.”
