INREV’s latest investor sentiment survey for Q4 2025 indicates that investors most favour Southern European markets, with a much improved sentiment towards Germany in recent months. There are fewer discussions around office attendance and obsolescence than 12-24 months ago and buyers are now more committed to executing deals.

This aligns closely with the latest GDP growth forecasts for Europe. Oxford Economics anticipates eurozone GDP growth will reach 1.0% in 2026, followed by 1.6% in 2027. Across Europe, Central and Eastern Europe and Southern European economies are expected to record the strongest GDP growth in 2026, driven by stronger domestic demand and investment. Western European economic prospects are expected to improve strongly next year, with Germany, for example, expecting GDP growth of over 2% in 2027.

During Q4 2025, average prime European office yields remained stable at 4.9%. Munich (-10bps), Hamburg (-10bps) and Prague (-10bps) all compressed, whilst Bucharest moved out by 20bps.

Mike Barnes, Director in Savills European Commercial Research team, says: “Tenants are getting stickier and opting to sign lease renewals given both the shortage of well-located prime office space, and the high cost of fitouts, which have risen an average of 67% over the last five years. Landlords are therefore able to capture rental uplift on lease renewals, which is delivering real rental growth, attracting more buyers to prime stock. Given the dearth of new development activity, we expect average prime rents to increase by 3.7% in 2026.”

James Burke, Director, Global Cross Border Investment at Savills, says: "Investor sentiment is turning and we are already, for example, seeing a notable uptick in interest in Germany, underpinned by expectations of a rebounding economy in 2026. Accretive debt is drawing in a deeper pool of investors, and we anticipate that we will see a further recovery of investment volumes in Europe this year.”