Over the past five years, the European real estate market has provided many investors with very attractive opportunities, with a large number of markets consistently delivering double-figure returns for high-quality and low-risk real estate investments.

This abnormal performance can be explained by a combination of factors. Firstly, the growth of cross-border investment led to improvements in the accessibility and transparency of key markets; in turn, this led investors to demand lower risk premia and, consequently, pay higher prices. At the same time, consistently low interest rates that were intended to support relatively weak economies allowed investors to enhance returns through the use of leverage. Both of these trends were supported by an increase in demand for investments, in general, and those with bond-like characteristics, in particular.

However, unlike previous periods of strong real estate returns, recent performance was dominated by capital growth from yie