Early 2025 saw property investors shift to risk-on, but uncertainty has led to a risk-off stance. U.S. policy ambiguity adds volatility, likely delaying recovery. Despite this, European real estate debt remains a compelling opportunity for insurers for three key reasons.
The start of 2025 marked a shift in investor sentiment within the European property market. Investors initially leaned towards a risk-on approach but have since taken a risk-off stance in response to heightened uncertainty.
Volatility surrounding U.S. policy clouds the outlook for the European economy and European CRE market, and this uncertainty is expected to prolong the recovery in transaction volumes. Increased risks to growth also mean further rate cuts are likely, with lower interest rates supportive for real estate pricing and values. Having already undergone a significant repricing, European real estate Debt appears reasonably well-protected against further property value volatility. When coupled with ample refinancing opportunities—driven by an expected €450 billion of debt maturities over the next four years—it paints a bright picture for the asset class.1
1. Source: Barings Research, MSCI. As of April 2024.
Issued by Baring Asset Management Limited (Authorised and Regulated by the FCA) for use in the United Kingdom.
