Bank of America has flagged European real estate as offering the largest potential upside in over 30 years, driven by structural demand shifts and favorable macroeconomic conditions. The firm highlights data centers and logistics assets as key growth catalysts.
- European real estate offers the largest upside in over 30 years, per Bank of America.
- French data center occupancy reached 96.3% in late 2025.
- Logistics lease rates in Benelux and Nordics rose 18% in 2025.
- REIT NAV premiums expanded to 15.7%, the highest since 2000.
- European REITs attracted $28 billion in foreign capital from Jan–Sep 2025.
- Cap rates for data centers and logistics compressed by 120 basis points in 18 months.
Bank of America has identified European real estate as the most attractive regional property market globally, citing unprecedented upside potential not seen in more than three decades. The firm’s analysis points to a confluence of factors—including rising demand for digital infrastructure, evolving work patterns, and favorable yield differentials—that have repositioned Europe as a top-tier real estate destination. Specifically, the firm notes that data center valuations in Western Europe have risen by 22% year-over-year, with France and Germany leading the surge. In France alone, occupancy rates for Class A data centers reached 96.3% in late 2025, up from 89.1% in 2023. Logistics warehousing in the Benelux region and Nordics also saw lease rates climb by 18% in 2025, reflecting strong e-commerce and supply chain resilience. The analysis further reveals that net asset value (NAV) premiums for European real estate investment trusts (REITs) have expanded to 15.7%, the highest since 2000, indicating growing investor confidence. This premium is particularly pronounced in sectors such as data centers and last-mile distribution, where cap rates have compressed by 120 basis points in the past 18 months. The shift has prompted increased capital inflows from U.S. and Asian investors, with European REITs attracting $28 billion in foreign inflows during the first three quarters of 2025. Major players including Unibail-Rodamco-Westfield and Land Securities Group have reported double-digit increases in asset valuations, while new development pipelines in Frankfurt, Amsterdam, and Paris are nearing full pre-leasing. These developments underscore a fundamental repositioning of the European real estate market, with capital now flowing toward high-quality, tech-enabled assets rather than traditional office or retail space.