When we last spoke to him in July 2024, Mike Bessell was predicting "a pick-up in activity in the 2nd half of 2024" in European real estate markets, and that "more transactions should be signed in the 4th quarter." A little over a year later, speaking to Business Immo TV, the managing director and European and global investment strategist at Invesco Real Estate paints a mixed, but nonetheless optimistic picture.
"Prices have recovered as we expected, while we have seen year-on-year growth in capital values since March 2024," he boasts at the outset, even reporting "some pockets of yield compression where revaluation had been excessive." In the same vein, Bessell notes that "rental markets remained robust," that "demand for quality space remained strong," and that "premium rents continued to rise due to insufficient supply."
"Transaction volumes, however, remain down," he laments — a phenomenon he believes is due to the multiple external shocks suffered by the real estate industry. "This year, these external shocks have taken the form of US trade policy, and the uncertainty caused by the tariffs imposed by Donald Trump has created great instability," he adds.
"European transaction volume in 2024 increased by 21% compared with 2023," Bessell reminds us, but declines of 7% and 10% were recorded in the first and second quarters of 2025 compared with the previous year. "This reflects a lack of investor confidence," he says.
Nevertheless, he assures us that investors are "generally positive" about European real estate. "They understand that in Europe, real estate yields are back above financing costs, which is a very important factor in being able to use debt profitably," says Bessell, adding that "we are also benefiting at the moment from the fact that Europe is seen as a safe haven in a difficult world."
The French market retains its appeal
Against this backdrop, is the political and economic instability in France likely to dampen investors' appetite for French stone? "I'm quite relaxed on this point," Bessell replies.
"History shows us that European real estate markets can be very detached from general political uncertainty," he reminds us, citing the recent example of Italy: "Italian government bonds were regularly trading around 200 bps above German bonds, while the additional premium on Italian property prices was very small."
Similarly, although French government bonds are "under pressure due to budget deficits and concerns about the direction of public spending," Mike Bessell points out that "the bonds of a number of key French companies are trading at tighter yields than government bonds."
This shows that "the financial markets are very successful in not passing on this political uncertainty and budgetary risk to the underlying companies," he concludes. So, while he refuses to be complacent about a situation that Invesco will continue to monitor closely, he does suggest that "unless we see concrete signs of policies that would significantly disrupt our business and our occupiers," the American asset management company has no intention of turning away from France. "Paris will always be by far the largest city in the European Union. No real estate investor will be able to ignore that."