European office sales slumped in 2024 to lowest since 2009, data shows
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The commercial real estate market globally has endured tough trading since the Covid-19 pandemic.
PHOTO: REUTERS
LONDON – Sales of office buildings in Europe in 2024 slumped to their lowest level since the aftermath of the global financial crisis in 2009, even as the region’s broader commercial property market showed signs of recovery, data showed on Jan 30.
The commercial real estate market globally has endured tough trading since the Covid-19 pandemic, largely driven by higher borrowing costs and changing working patterns, the latter hitting offices particularly hard.
In 2024, €42.4 billion (S$59.58 billion) worth of office properties changed hands in Europe, down 10 per cent on the prior year and representing the lowest volume in 15 years, according to data from Morgan Stanley Capital International (MSCI).
Sales of offices remain in the doldrums in Europe, with few larger deals and those put on the market – such as London’s CityPoint and “Can of Ham” towers – struggling to find buyers. Agents say only newer, greener offices remain in high demand.
However, after two years of contraction, deal volumes for Europe’s wider commercial property sector turned positive in 2024 due to increased sales of industrial buildings, apartments and hotels, the MSCI data showed.
Across the overall sector, €188.8 billion worth of properties were sold, up 4 per cent on the prior year, although this was still the second-lowest total in 12 years.
Mr Tom Leahy, head of Europe, Middle East, and Africa real assets research at MSCI, said real estate prices and Europe’s broader growth prospects were still susceptible to ructions in bond markets, amid broader financial market volatility since Mr Donald Trump began his second term as US president.
“Certainly there are pockets of positive news which give grounds for optimism,” Mr Leahy said of the real estate market. “(However) the recovery is not happening everywhere and neither is it happening all at once.”
Real estate investors in Europe rank residential, industrial and student accommodation as their top three investment preferences for 2025, ahead of offices, a survey by trade body INREV published earlier in January found. REUTERS
