According to Brookfield, one of the world’s largest real estate investment managers, the European real estate market is poised for even more transaction activity in the coming period, driven by a combination of declining borrowing costs and increasingly attractive asset valuations.
Earlier this year, consortiums backed by Singapore’s sovereign wealth fund GIC acquired nearly €2.2 billion (US$2.6 billion) in European real estate. Meanwhile, acquisitions led by Japan’s SMFG, Mitsui OSK Lines, and the founder of Uniqlo contributed to a record volume of Japan-originated transactions in the first half of the year, according to MSCI.
This momentum has carried into the second half of 2025. Brad Hyler, Co-Head and Head of Europe for Brookfield’s Real Estate Group, expects continued interest from Asian investors, citing the region’s resilient economies and strong property fundamentals.
“We’re seeing increased activity from Asian investors and buyers in Europe,” Hyler said in an exclusive interview with Mingtiandi. “There are some differences in interest rates and the carry trade, but overall, there’s a prevailing sense that Europe presents a significant opportunity. The economies have proven quite resilient, and the underlying supply-demand dynamics in real estate remain robust.”
Falling Interest Rates, Rising Returns
Following the European Central Bank’s rate hikes that pushed interest rates to 4.5% in 2023, cuts began in June of last year. With the benchmark rate now reduced to 2.15% and European economies showing signs of stabilization, Hyler notes that the environment has curbed new development activity while prompting sellers to reduce asking prices.
In May, Brookfield’s team acquired Generator Hostels, a London-based boutique hospitality brand, for €776 million. The deal included 15 properties across major European cities that blend hostel-style accommodations with budget hotels and community-oriented experiences for travelers. Brookfield now plans to leverage its hospitality expertise to grow the Generator brand through both acquisitions and third-party management contracts.
Landmark Transactions and Expansion Plans
In July, Brookfield completed the largest-ever sale of a hospitality asset in Spain, offloading the Mare Nostrum hotel in Tenerife for €430 million. Hyler sees the continued strength of the European travel sector as a strong catalyst for further expansion of the Generator portfolio beyond its 15-city footprint.
“It’s a very flexible model, in terms of how the rooms are configured — whether for individuals or groups,” Hyler explained.
Germany’s Fiscal Push Could Boost the Region
With Germany recently approving a record investment budget for 2026 aimed at “future-proofing” its economy, Hyler believes this fiscal expansion will stimulate broader economic growth — not only within Germany, but potentially across its neighboring countries.
“They’ve announced some major fiscal initiatives, particularly focused on infrastructure and defense spending. They have the capacity to do so, and it’s likely to act as a powerful economic stimulus,” said Hyler, who brings over 20 years of industry experience.
Targeting High-Growth Niches
Beyond hospitality, Brookfield continues to find value in purpose-built student accommodation. In June, the firm agreed to sell its Livensa student housing portfolio in Spain and Portugal to CPPIB and Nido Living for €1.2 billion — an asset it had acquired in 2019.
Hyler sees strong investment potential in this segment, particularly as geopolitical shifts push more international students to reconsider where they study. Many top European universities are expanding English-language programs, increasing demand for high-quality student housing.
“We see an opportunity to develop more purpose-built student accommodation across several countries — and that’s something we’re focusing on,” he said.
Office Market: The Next Sector to Watch
Having realized strong returns in hospitality and student housing this year, Brookfield is now eyeing commercial office assets — particularly high-quality buildings in capital cities.
“I think offices will be the most interesting sector to watch, especially top-tier offices in capital cities across Europe,” Hyler said. “Tenant demand continues to improve, and there’s now a real shortage of high-quality, newly built or recently renovated space.”
European banks — including UBS, Deutsche Bank, and Santander — have been urging employees to return to the office more frequently. This trend has contributed to a surge in leasing activity, with office take-up in London during Q2 rising 16% above the 10-year average, according to Savills.
