Are offices back in business or just back on the market?

Following a challenging few years for the sector shaped by COVID-19, flexible working, weaker economic growth, and higher interest rates, capital sources into the European office market are broadening, with overseas investors playing a key role. Cross-border capital increased by 46% year-on-year in the first nine months of 2025, according to MSCI Real Capital Analytics.

A wide range of players are re-engaging with the sector. Private equity is targeting core markets including Paris and the top 5 German cities and UK funds have now resumed buying. This renewed activity signals growing confidence in European offices as investors seek to deploy capital where opportunities are emerging.

There is also renewed appetite for larger assets. European office transactions above €200 million rose by 20% year-on-year in the first nine months of 2025, according to MSCI Real Capital Analytics. A good example of this is the Trocadéro building in Paris which represents one of the largest and most symbolic office transactions in Europe in 2025. This transaction reflects a broader trend, with “big ticket” deals reappearing in key markets including Frankfurt, and Munich.

Strong rental growth in several European key cities is further attracting investor interest. Record rents are being achieved across some of Europe’s most sought-after city-centre locations. In Munich for example, prime rents have risen by 41% from €39 per sqm per month in the beginning of 2020 to €55 per sqm per month in 2025, with a handful of transactions recorded as high as €70 per sqm per month. Paris CBD now stands at €1,200 per sqm per annum.

While prime CBD locations continue to be in demand, peripheral markets are seeing a slower and more uneven pace of activity. In Paris, La Défense, however, offers a compelling value proposition: occupiers can secure best-in-class offices at less than half the rent of CBD space, along with generous incentives, and investors are starting to take notice. Affordability and accessibility can revive more decentralise submarkets, yet quality and connectivity remain non-negotiable.