Concerns that Europe’s economic growth outlook lags that of the USA

Ivo van Breukelen, Managing Partner (US/EUR/UK) at The Proptech Connection (PTC) says, “At PTC we often hear concerns from our investor network that Europe’s economic growth outlook lags that of the USA.

However, the European real estate market has experienced significant price adjustments already in this cycle creating compelling investment opportunities.

We also see some interesting geographic or sectoral opportunities where several sectors stand out for fundamentals.

The wider “sheds and beds” sectors face supply constraints, strong demand, and secular growth trends but our focus here is on logistics.

Prime logistics properties are experiencing extremely low vacancy rates, a trend that is expected to persist until at least 2028.

This is due to higher development costs, increased capitalization rates, and stricter environmental regulations limiting new construction.

At the same time, long-term factors such as growing e-commerce penetration and the shift toward nearshoring continue to drive demand.

Supply is not keeping up with demand in this space and faces increased competition for new plots from the new real estate darling of hashtag#datacenters and other alternative uses such as life sciences, etc.

We see interest in upgrading older stock and embedding tech to make spaces more productive.

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