As the European real estate industry gathers in Munich for EXPO REAL, investors are navigating a market defined by both uncertainty and evolving opportunities. While sentiment remains cautious amid ongoing economic and geopolitical challenges, opportunities continue to emerge for investors with disciplined underwriting and a long-term perspective.
Here are four key themes we expect to shape conversations at this year's conference.
Compared with last year’s conference, the mood in Germany is likely to be more subdued. Europe's largest economy continues to face a range of challenges, including weaker industrial activity, geopolitical uncertainty and lingering concerns around inflation and interest rates.
At the same time, increased defense spending across Germany and Europe could create an important counterbalance to some of these challenges. As governments commit more capital to defense, security and strategic manufacturing capabilities, demand for specialized industrial facilities and production infrastructure could increase. This investment has the potential to support certain manufacturing sectors, create new occupier demand and generate opportunities for real estate investors.
Macroeconomic conditions will continue to play a central role in real estate investment decisions across Europe over the next 12 to 18 months. While many investors had anticipated a more accommodative financing environment, recent rate hikes by the European Central Bank and the rise in long-term interest rates have added a new layer of complexity to the market.
As a result, real estate investors remain focused on how financing costs, capital availability and geopolitical developments could influence property values and transaction activity across Europe.
Periods of uncertainty can create selective opportunities, but disciplined underwriting and a long-term outlook remain critical for investors when evaluating new investments.
Despite broader market uncertainty, the outlook for the European sale-leaseback market remains positive.
As companies look for ways to strengthen balance sheets, improve liquidity and fund strategic initiatives, sale-leasebacks continue to offer a compelling source of capital. Private equity sponsors are similarly exploring sale-leasebacks as a tool to unlock value, support acquisition financing and optimize capital structures.
While a significant inflationary or interest-rate shock could have a short-term impact, the broader trend points toward increased activity. As financing costs remain elevated and capital efficiency becomes more important for companies, sale-leasebacks are expected to remain a valuable financing solution across a variety of sectors.
Artificial intelligence continues to drive enormous interest in data centers and digital infrastructure. However, alongside the enthusiasm, important questions remain.
Energy availability is emerging as one of the sector's biggest constraints. Across many European markets, power capacity is becoming increasingly difficult to secure, creating a bottleneck for future development.
At the same time, investors are still evaluating how these assets should be valued over the long term. Rapid technological evolution, equipment depreciation and uncertainty around residual asset values create questions that have yet to be fully answered by the market.
This may place a premium on assets and markets with reliable access to power and infrastructure capable of supporting future demand.
Success in the current landscape will not be defined by predicting the next market shift, but by identifying opportunities that can withstand it. In an environment marked by uncertainty, investors focused on high-quality tenants, mission-critical real estate and creative capital solutions such as sale-leasebacks will be well positioned to take advantage of emerging opportunities.
Net lease continues to be one of the core investment strategies employed in the global real estate market, but conditions in the US and Europe do not strictly mirror one another, explain Christopher Mertlitz, Head of European Investments, and Zachary Pasanen, Co-head of North American Investments.
As companies navigate a rapidly changing business environment, sustainability is increasingly shaping real estate decisions.
This year’s EXPO Real in Munich brought together real estate professionals from over 70 countries, eager to assess the market’s trajectory as we head into 2026.
As the European real estate industry gathers in Munich for EXPO REAL, investors are navigating a market defined by both uncertainty and evolving opportunities. While sentiment remains cautious amid ongoing economic and geopolitical challenges, opportunities continue to emerge for investors with disciplined underwriting and a long-term perspective.
Here are four key themes we expect to shape conversations at this year's conference.
Compared with last year’s conference, the mood in Germany is likely to be more subdued. Europe's largest economy continues to face a range of challenges, including weaker industrial activity, geopolitical uncertainty and lingering concerns around inflation and interest rates.
At the same time, increased defense spending across Germany and Europe could create an important counterbalance to some of these challenges. As governments commit more capital to defense, security and strategic manufacturing capabilities, demand for specialized industrial facilities and production infrastructure could increase. This investment has the potential to support certain manufacturing sectors, create new occupier demand and generate opportunities for real estate investors.
Macroeconomic conditions will continue to play a central role in real estate investment decisions across Europe over the next 12 to 18 months. While many investors had anticipated a more accommodative financing environment, recent rate hikes by the European Central Bank and the rise in long-term interest rates have added a new layer of complexity to the market.
As a result, real estate investors remain focused on how financing costs, capital availability and geopolitical developments could influence property values and transaction activity across Europe.
Periods of uncertainty can create selective opportunities, but disciplined underwriting and a long-term outlook remain critical for investors when evaluating new investments.
Despite broader market uncertainty, the outlook for the European sale-leaseback market remains positive.
As companies look for ways to strengthen balance sheets, improve liquidity and fund strategic initiatives, sale-leasebacks continue to offer a compelling source of capital. Private equity sponsors are similarly exploring sale-leasebacks as a tool to unlock value, support acquisition financing and optimize capital structures.
While a significant inflationary or interest-rate shock could have a short-term impact, the broader trend points toward increased activity. As financing costs remain elevated and capital efficiency becomes more important for companies, sale-leasebacks are expected to remain a valuable financing solution across a variety of sectors.
Artificial intelligence continues to drive enormous interest in data centers and digital infrastructure. However, alongside the enthusiasm, important questions remain.
Energy availability is emerging as one of the sector's biggest constraints. Across many European markets, power capacity is becoming increasingly difficult to secure, creating a bottleneck for future development.
At the same time, investors are still evaluating how these assets should be valued over the long term. Rapid technological evolution, equipment depreciation and uncertainty around residual asset values create questions that have yet to be fully answered by the market.
This may place a premium on assets and markets with reliable access to power and infrastructure capable of supporting future demand.
Success in the current landscape will not be defined by predicting the next market shift, but by identifying opportunities that can withstand it. In an environment marked by uncertainty, investors focused on high-quality tenants, mission-critical real estate and creative capital solutions such as sale-leasebacks will be well positioned to take advantage of emerging opportunities.