There was a tangible sense the commercial property industry isn't just ready for better times but witnessing them at this year's Expo Real conference in Munich. It was boosted no doubt by an increase in delegates and almost chaotically busy scenes at the leading brokerage's stands.

Meeting a contact at the CBRE or Savills or Knight Frank or JLL or Cushman & Wakefield stand was a challenge in itself, and the event felt all the better for it. A cold, rainy Munich throughout the three days may be added to this by forcing delegates indoors, but it did little to dampen spirits.

And that is because change is in the air. The familiar topics of recent years in commercial property, the focus on income and asset management and fundamentals in the face of uncertain times for investment liquidity and yield compression, were still evident. Also at hand was the still clear focus on thematic investments in the structurally supported areas like the living sector, logistics and alternatives.

But there were a lot more people, more than even at the Mipim event in March, talking about how these areas have become a little too competitive and over-invested, and how the increasingly resilient office and retail sectors are providing compelling alternative opportunities.

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7 Min Read

October 09, 2025 08:30 AM

Will political and economic instability hamper French real estate markets?

In the halls of Expo Real, domestic and international investors give us their take on the, again, uncertain state of French real estate

Luc-Étienne Rouillard Lafond

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Inevitably geopolitics dominated talk, not least as the event played out to a backdrop of the French Prime Minister Sébastien Lecornu resigning after just 26 days in the job, and a bitter American government shutdown. But again delegates seemed a lot more sanguine about such events, and a lot more ready to push them to one side and focus on making deals and fresh opportunities.

Those putting on the event say a total of 1,742 exhibitors from 34 countries and about 42,000 participants from more than 70 countries attended, a slight increase over the previous year. It flagged particularly an increase in the number of non-German international participants by almost five percent.

The housing market, and in particular a focus on affordable housing, pioneering construction concepts and retrofitting existing properties, dominated the event presentations, unsurprisingly given Europe's well documented problems getting houses built for swelling populations.

The event planners launched a “Flexible Housing” forum and Expo Real was attended by German Federal Building Minister Verena Hubertz, who stated in a keynote speech: “We need to put the focus back on construction. Everyone also agrees, no matter at what level you talk to people, whether it’s the mayor or a young family: we need more affordable housing.”

Eamon Ryan, chairman of the Housing Advisory Board of the European Commission in Dublin, added that Europe is facing a profound crisis in affordable housing. "Addressing it must become a top political and economic priority. I firmly believe that public and private finance must work hand in hand if we are to solve the affordable housing challenge."

Technology was also a prominent feature of many forums and events, focusing on reducing carbon and digital business models through to data-driven project development. Expo Real set aside a space for the “Transform & Beyond” area where more than 80 exhibitors, including 50 startups, showcased proposed solutions to address future challenges.

As always though other conversations about market-moving transactions, developments and activity were taking places in huddles and conversations at stands or in the evening back in the heart of Munich at dinners and events. So what were the key themes?

Neil Slater, chief executive officer at Redevco, without doubt one of the busiest real estate companies in Europe over the past 12 months, said the Expo Real weather was still reflecting a market that could be described as cloudy with outbreaks of sunshine over the past couple of years. At the same time, while the market had been facing one of the toughest capital raising environments in his memory for real estate, his company had still managed to launch a €500 million retail park fund the week before Expo Real, principally because investors are listening carefully to strong stories, and are then committing.

"In some ways Redevco is real estate's biggest best kept secret and we are on a journey bringing that to the fore," he said. "We have evolved the leadership. We have stepped up our investment in retail parks, added logistics with the acquisition of the Roebuck business and added a debt platform. But we have always been a huge investor in retail parks and high streets and communities and really the investments are adjacencies to the proprietary balance sheet. The proprietary retail balance sheet business has brought in third party capital over time. It has been about building value for investors while also doing good in the community and doing it sustainably."

Chris Fleetwood, chief operating & sustainability officer, said the company has an ambition to be a force for good as well and that plays well with investors.

Slater points out that the new retail park fund has a commitment from real estate firm CBRE IM and is seeded with some of its assets in the United Kingdom and Belgium: "We have been able to move quickly with our own capital and with no debt. That has helped us source cracking deals."

Fleetwood says important is a transactions-led approach focused on brown to green initiatives: "We are selective about what we do and we want to push sustainability boundaries. In Europe, retail is back on the menu. It has been resilient and there is pent up demand for product in the right locations."

Michael Neal, global chief investment officer of Savills Investment Management, and Kevin Aitchison, MD, Head of Europe, both agree there are more positive noises from investors wanting to do deals.

Neal said: "Valuations have been troughing across Europe but over the last 12 months, primarily off of the back of the strong rental market, there have been encouraging signs of steady growth. For investors, there is a relative cost of capital compared to other asset classes and real estate must compete, but for the right strategy and assets that is definitely the case. The cost of capital in Europe is particularly attractive with tightening credit spreads and lower rates being additive to cash flow."

He added that in the United Kingdom there is a higher financing rate but what he called attractive opportunities on a deal by deal, sector by sector basis. He said London and regional central business district offices "we are positive about, private equity is coming in to look at those markets. And then on the debt side investors are keen on brown to green and that demand is significant, which means equity should be getting into a good place for value add in London."

Neal adds that residential and the themes of beds and sheds and alternatives remain core for long-term investors.

Aitchison says there are a lot of Dutch investors and German investors at Expo. While there are not so many United Kingdom investors, he said, "the Nordics are well represented. It is a good spread. There is talk of less capital looking at" the United States because of what he said is more turbulence there, "but then there is an Italian group here talking about developing data" hubs United States clients.

Neal adds that critical is the replacement costs for real estate are not going down any time soon. Aitchison adds that is being exacerbated by a presumption against demolition planning in the United Kingdom.

At CBRE's always bustling stand at the entrance of the exhibition hall, Jack Cox, managing director, head of European Industrial & Logistics Capital Markets, describes an industrial market that is moving positively again as investors become more pragmatic and committed.

Cox said at Expo Real the trick is to listen as much as you can. So what has he heard? "There is increased pragmatism now, particularly among buyers who are focused on obtaining appropriately risk-adjusted returns that reflect both their cost of capital and the outlook for income growth in a slower occupational market. Highly accretive debt is helping buyers to close the bid-offer spread.”

Maarten Otte, head of investor relations, CTP, the European industrial development giant sees multiple opportunities in multiple countries, although still not the United Kingdom: "Our business model comes down to what the tenant wants and where the demand is. The Central and Eastern European market is undersupplied and there is economic growth of 2.5% to 3%, it is strong fundamentals." He said that with the United Kingdom "the problem is it is too expensive for opportunities and it does not invest in its infrastructure. We find Germany does invest in its infrastructure and it always reinvents itself. There is strong demand in the country from tenants in the defence, cleantech, semi conductor sectors."

Otte suggests a common focus across its developments is key to keeping momentum. "Our focus in our business parks is providing full service amenities and developing for a start up community. Our development in CEE countries is more greenfield focused and elsewhere in Western Europe more brownfield but it is always about tenant demand."

In terms of Expo, Otte has plenty to tell the market about. "We are at Expo as a €600 million bond is launched for the company. Expo is a great opportunity to connect and potentially to do more M&A. But in terms of themes and sentiment we try not to be led by what other people feel and we try to focus on what we hear ourselves."

Otte says it is true that ESG demands have flattened a bit. "We are long-term investors though. We hold for 30 to 40 years so we are always building sustainably, we have to. We are are now looking at Vietnam. It works as a China plus one investment as it is less politically volatile than say other parts of South East Asia."

Amos Chia, CIO and co-founder EGLS, is in town to promote his new(ish) company, which is already something of a force in Europe: "This year at Expo, we are here launched with backing from Kamco and I think people are impressed with the growth of the business. There are now 27 in the team, putting boots on the ground in countries we are working in. We are of the opinion the way to drive high digit returns for our investors at present is in development and we have built a strong team focused on this. We will be launching in the Netherlands too."

Chia says of the markets it has been reviewing, the United Kingdom is tough at the moment. "It is very transparent and all the players know one another so it is very competitive. We are doing deals in Spain in particular. Really there is a lot of investor interest in Spain. The macroeconomic story is going very well and sentiment and take up are improved. It is not so transparent as a market too so there are opportunities to unlock development. Expo has definitely underlined our convictions as a business. With property it is all about timing and it is tough to get strong returns out of debt now. People are looking at equity and development for these reasons."

There is no doubt that offices are back on investors' minds, though with the caveat it is for value-add opportunities in the core gateway cities in particular. There is evidence though that in the very best locations in cities such as London and Paris that core and core plus are increasingly appealing, and bigger transactions.

A quick count while travelling between stands talking to key players backs this up, with 14 central London office investments of over £100 million in price having already completed this year, and a further 12 under offer. Only 12 completed in the whole of 2024. Click here to read more on these figures.

Rob Jackson, head of City investment properties, CBRE, agrees: "We're forecasting strong rental growth across central London with rents already rising sharply for best-in-class assets, with certain occupiers prepared to pay the premium associated with top-tier specification, amenities and sustainability credentials. We're seeing that translate into a deeper buyer pool for assets priced appropriately in the City. As ever, it's all about location."

Emilie Jaskula, global head of offices within the asset management team at Axa IM Alts, describes investor sentiment at Expo Real as "still quite cautious with maybe a bit more optimism for next year that there will be a meaningful return in confidence".

"For us, core office assets in central locations are just beginning to see a return of real depth in terms of investor interest. There are several core assets for sale in Europe, notably in Germany, and that will be a bit of a litmus test on investor appetite and investment capabilities. For value add opportunities in core areas the transaction market is already very competitive, with sometimes up to 20 bids received for some assets."

She points out that AXA's focus is to continue adding value across its existing portfolio.

They are always looking at "capital expenditure to generate reversionary improvements in core locations such as Frankfurt, Munich, Paris, London, Milan. We have conviction in the underlying leasing markets and rental projections in these resilient gateway cities."

One key challenge for office assets she says in this "flight-to-quality" environment is to find the value of amenity in smaller scale offices, versus a 22 Bishopsgate for example, the City of London's tallest building, which is much bigger and which AXA completed during the pandemic and has fully leased up. "For instance France is a very mature market for understanding the pricing of amenity in rents, probably more than say" the United Kingdom or Germany. She added that "it is more and more acceptable that 15 to 20% is common areas dedicated to amenities and factored in the rents."

Other than this she says that regarding the performance of letting markets, the flight to quality is driving strong demand. "We expect this to spread to edge of CBD locations, while availability for quality assets will become scarce in central locations. We are already seeing that with an uptick in activity for higher standard assets in markets such as La Defense in France, for example the letting success of our asset The Stack, currently under development in Munich and which is already 55% prelet."

Oliver Bamber, United Kingdom director for the central London and international division, Savills, says that when it comes to the City of London what has happened during the quieter transactional period is it has rejuvenated with phenomenal public realm and incredible new buildings: "The place is now chock-a-block all week. At Expo we are hearing of investors saying they want to sell out of some exposure to logistics. If so where will that money go? It has to be offices."

Richard Garside, head of central London investment, is equally positive: "We have the West End prime yield now at 3.75% and the City at 5.25% with the arrow firmly pointing down.

"Since the summer investment in core and core plus central London offices as a comparative play to other asset classes is looking more and more good value particularly in terms of rental growth. The depth of demand for value add has remained very strong. It is true that the smaller end of the sales market is producing data and the bigger end less so but that is changing."

Sebastian Dooley, senior fund manager covering the European Data Centre sector at Principal Asset Management, described what he calls the "DeepSeek AI moment" earlier in the year when queries arose over how robust the Chinese tech companies' model was as being good for his company's investment strategy in the space.

"It may look a little overblown now the response," he said. "But it led to a nuancing of interest in the sector with people seeing more risk in the AI model. Our interest is in the triple net lease investments in colocation assets and in assets in the cloud availability zones, like the area from Slough to Hayes in the UK. It is a well established model with some barriers to entry."

That means the group has a perfect blend he says of the "base case of solid fundamentals in the data centres we invest in, attached to the upside case of" artificial intelligence.

Dooley adds that there is a trend in Europe of a diversification away from the United States in terms of companies setting up their own data hub processes. "That complements global infrastructure strategies and reflects a growing interest in digital sovereignty. Expo has been a good chance to meet new clients and brokers and see people who know specific locations very well."

Marie Hunt, head of research at IPUT, the leading listed Irish office and logistics investor, said there has been continued momentum in the Irish commercial real estate sector during the third quarter, with evidence of greater liquidity in the investment market and stable volumes of occupier leasing activity recorded in the office, logistics and retail sectors. "The IPUT Property Fund has now experienced two consecutive quarters of positive total returns. Against this backdrop, our Fund offers incredibly attractive relative value at this point in the cycle,” she said.

Hunt added that a key focus for IPUT is growing its logistics portfolio to react to what she terms the unique structural and cyclical drivers supporting demand in this sector of the Irish market.

"During the last few months, we have commenced construction of two units at our next state-of-the art development at Nexus Logistics Park in north Dublin near Dublin Airport, which will extend to more than 2.5 million square feet. There has been nothing of the calibre of this scheme developed before in the Irish market, it includes a running track and a padel court for instance. It has attracted considerable interest here at Expo. The glulam structural frame on Unit 4 of 112,400 square feet is progressing well, with practical completion due in the first quarter of next year and we recently commenced construction on Unit 8 at 53,000 square feet. Both buildings are attracting good occupier interest."

Hunt says competition is intensifying for best-in-class workplaces which in turn is boosting rental growth prospects, particularly in the office and logistics sectors. "With the Central Bank of Ireland having recently upgraded its forecast for Modified Domestic Demand (MDD) in 2025 from 2% to 2.9%, we believe that Dublin commercial real estate is set to deliver outperformance in a European context over the coming years."

In terms of Expo Hunt says IPUT has been coming to Expo for many years now and is proud to have the only Irish stand at the exhibition.

"Expo gives us an opportunity to meet with existing investors and also to reach out to potential new investors. Our 60 year-track record and support from key investors including the Irish sovereign and many leading international investors including PIMCO, CBRE IM and Allianz are testament to the quality of our portfolio, our commitment to delivering exceptional workplaces, our focus on sustainability and our ability to generate strong returns for investors."

CBRE Investment Management and the Ireland Strategic Investment Fund committed €115 million to a €230 million logistics fund established by IPUT Real Estate in March.

Niall Gaffney, chief executive, IPUT, is here to bang the drum for Dublin as well as IPUT: "Dublin is a core investment market and a European gateway city. Office leasing activity has been consistently strong with demand mainly emanating from professional services and financial services occupiers. Within our own portfolio, at IPUT Real Estate, which is wholly concentrated in Dublin, we have completed more than 100,000 square feet of new office lettings in the last quarter alone. In our experience, the quality of the amenity offering in our city centre workplaces has been instrumental in attracting occupiers.

“Like many other core markets, Dublin is now facing a significant supply crunch. The Grade A+ availability rate, which according to JLL, currently stands at approximately 4.5%, is set to be completely eroded in the next two years. With no modern sustainable office accommodation available in the prime CBD, we believe that Dublin is set to achieve above-average office rental growth over the next 5-year period. This trend is also in evidence in the prime logistics sector of the market where we are anticipating outperformance. Dublin therefore looks attractive from an investment perspective."

Expo Real was also home to companies with jobs to fill and non-transactional opportunities to highlight.

The Society of Industrial and Office Realtors', known as SIOR, international representative Paul Danks and acting CEO Brandon Hensley are on the lookout for a new CEO for the global body connecting industrial and office brokers. Hensley said: "A significant point of difference with SIOR, in addition to maintaining the highest professional standards across its international membership, is that it is about doing deals. SIOR puts our members in contact with other trusted advisers across the globe that they can work with. There is a rigorous process to be invited to be a member. Our remit is to grow internationally and grow the diversity of the membership."

In the last year SIOR's European Chapter reported almost 10% membership growth, the duo says.

Christie Wright, co-lead of Patrizia's investment management platform, says the German investment giant is seeing the benefits of a new operating model launched earlier this year, as reported on here exclusively at the conference.

"The sector focus means we can take learnings in the Netherlands for instance and apply that to projects in Spain. It is bringing benefits to performance and returns. But also to our team who are experiencing and seeing the benefits of investment across the entire life cycle of assets." Wright said the United Kingdom has seen prices bottom out which is making it more investible. "In Germany pricing is not quite there yet for instance," she said.

One thing is clear, the brokerage world is ready and relishing likely better activity.

Murray Strang, managing partner for Scotland, Cushman & Wakefield, said there are 160 C&W representatives from across the world at Expo Real and it is an opportunity to soak up strategic business plans from across the business.

"I got to speak on the positivity I am seeing in the office market on Sunday. Also, it is a small world real estate and highly useful to compare notes. We have new leadership looking to drive big growth. I think we have been through choppy waters in the last two to three years but now the market is picking up more and there is a more stable economic picture."

Strang said in his specialist field of offices it is like turning a tanker but companies are getting to grips with occupier workplace strategies and it is really a time for it to bounce back as a sector.

"There is rental growth and confidence. Investor interest remains in value add but now better and more advanced conversations are being had on core and core plus," Strang said. The question in many United Kingdom cities "is where is the supply and stock coming from. It has been why sell at this point in time for a while? London prime office yields have come in 25 bps we are saying for the first time in 24 months. The prime core yield in Edinburgh is 6.5%, and in Manchester and Bristol 6.75%. To spec though developers still need to know the timeline on lease up because of the cost of construction."

Chris Pilgrim, the new United Kingdom head of capital markets group at Avison Young, is on a mission to supercharge growth of its capital markets. He is back in the United Kingdom "now to build the capital markets platform. We are very much in growth mode. Definitely we are looking at London offices. The market is largely performing again. We will leverage existing teams and the message is we will add too. It is a great time to look to do this in the market. We will bring in best in class recruits as well as via M&A."

Pilgrim said the broker has a high level of support from its American business. "Globally and in Europe we have been fundamentally a brokerage business and we want to be in line with this" in the United Kingdom. He added that ultimately the United Kingdom is the most investible market globally, a lot of parties are looking to the United Kingdom to diversify, into assets such as offices and student housing. He said there "has been a knock on effect" from the United States becoming more difficult for foreign students, with them looking to the United Kingdom and Australia in particular.

If there has been one key takeaway from Expo 25, it has been the number of real estate professionals like Pilgrim looking to grow companies and target recovering transactional markets.