News / Insights

In this in-depth analysis, EPRA examines the changes that have taken place in the European listed real estate market over the past decade. During this period, the European listed real estate market has experienced a phase of high volatility, marked by macroeconomic and geopolitical shocks such as Brexit, the pandemic, and global conflicts, which have led to high inflation and a rapid rise in interest rates. Between 2015 and early 2020, the sector had posted a 39% return, which was, however, wiped out by a 41% plunge in the first weeks of the COVID-19 pandemic. After a rapid rebound (+68% in the nine months following the pandemic low), the sector suffered a further 45% correction between 2022 and 2023 due to monetary tightening. Overall, the total return stood at 27% since 2015 and 28% in the post-COVID period (2020–2025). The sector has generally shown good operational resilience: prior to the pandemic, rental revenues grew by an average of 4.2% annually and EBITDA by 4.4%, while following the 2020 decline (-5.3% EBITDA), a recovery was recorded, with growth returning to above-inflation levels starting in 2023.

Dynamics varied markedly across different asset classes. Offices and retail were the hardest hit by the pandemic and structural changes (remote work and e-commerce), with a growing polarization between prime and secondary assets; for offices, the average initial net yield in the post-COVID period was 5.38%. Retail saw investment volumes drop from €80 billion in 2015 to €38 billion in 2021, before stabilizing with higher yields (post-COVID NIY at 7.92%) and a selective recovery in certain segments. In contrast, logistics and residential demonstrated greater resilience: logistics doubled its share of investments (from 10% in 2015 to over 20% in 2021) and continued to attract capital (€42 billion in 2024), while residential benefited from structural demand and a shortage of supply, with rent growth of 5.52% in 2024. Alternative assets (data centers, healthcare, student housing) have also established themselves as core components, supported by trends such as digitalization and demographics, with annual growth prospects of 16.4% to account for 26% of the index by 2034.

From a financial perspective, the real estate sector has significantly strengthened its structure: the debt-to-equity ratio remained stable, while the share of fixed-rate debt rose to 85% (from 66% prior to 2015) and the interest coverage ratio improved from 3.6x to 5.3x. About 75% of companies maintained or improved their credit ratings, and capital raising averaged €23.5 billion annually, peaking at over €35 billion in 2021 and €29.7 billion in 2025. Despite solid fundamentals, equity markets showed mixed performance, with half of the years ending in the red. Looking ahead, EPRA anticipates a period of normalization amid higher (2–4%) but more stable interest rates, with the sector well-positioned to benefit from structural megatrends such as urbanization, the energy transition, and digitalization.