News / Insights

The INREV and EPRA report highlights the strategic role of the real estate sector in supporting economic growth, employment, environmental sustainability, and housing affordability in Europe. In 2025, the commercial real estate sector contributed approximately 3.3% to the European economy’s value added, amounting to 633.8 billion euros, and directly employed 5.3 million people. Its market value is estimated at approximately 10,100 billion euros. The sector also plays an important social role in providing spaces and services to businesses and communities through offices, logistics and industrial properties, retail spaces, hospitality and healthcare facilities, data centers, and other real estate functions.

Over the past decade, the importance of institutional investments in the residential sector has also grown, in response to unmet demand for high-quality, sustainable, and affordable housing. Since 2013, institutional investments in housing have increased fivefold, reaching 796 billion euros by the end of 2025 and accounting for 26% of total institutional real estate investments, compared to 14% in 2015. It is estimated that these investments correspond to approximately 4 million rental units, a share that remains modest compared to the 71 million rental units in the EU and the United Kingdom. 92.5% of investments are directed toward single-family and multi-family homes and senior living, while the remaining 7.5% are in student housing. Overall, institutional investments still account for less than 2% of the estimated value of Europe’s housing stock, which stands at 47,900 billion euros, highlighting the potential for further growth.

Another key area is the retrofitting of existing real estate, which is essential for reducing emissions and improving the energy efficiency of buildings, with positive effects on housing costs as well. According to analyses by INREV and EPRA, the built environment accounts for 37% of European emissions linked to final energy consumption, including both those generated by the use of buildings and those embedded in materials and construction processes. In 2025, annual investments in new commercial real estate construction and the retrofitting of existing buildings reached 342 billion euros, accounting for 11% of total fixed investments in the EU and the United Kingdom. When investments in housing, infrastructure, and other nonresidential buildings are also taken into account, the total rises to 2,200 billion euros, accounting for nearly two-thirds of total fixed investments. The report also estimates that nearly 60 billion euros per year in investment will be needed by 2030 to achieve energy efficiency and decarbonization goals. Real estate funds, publicly traded companies, pension funds, and insurance companies play an important role in financing the transformation of the building stock. In particular, European pension funds and insurance companies hold real estate exposure of nearly 1,000 billion euros, equal to 5% of total assets under management.