A NEW ERA IN EUROPEAN REAL ESTATE INVESTMENT: WHAT IS INSTITUTIONAL CAPITAL LOOKING FOR IN 2026?

THE REAL CHANGE IN EUROPEAN REAL ESTATE IN 2026

As Europe enters the second half of 2026, the main change in the real estate market is not so much a renewed increase in investment volumes as the more selective and infrastructure-focused movement of capital. Financing costs, geopolitical uncertainty and performance differences between assets are leading institutional investors to assess not only the purchase price, but also a property’s income-generating capacity, operational resilience and future liquidity.

The European Central Bank’s decision of 11 June 2026 to raise its key interest rates by 25 basis points showed that financing conditions have once again become a sensitive variable in investment decisions. Institutional capital is therefore evaluating borrowing costs, rental growth and refinancing risk alongside the opportunity to benefit from price corrections.

CBRE’s 2026 European Real Estate Market Outlook states that living-sector real estate continues to lead investment volumes, global capital interest in logistics remains strong and data centre investments have growth potential driven by demand for artificial intelligence. PwC and the Urban Land Institute’s Europe 2026 report also highlights operational assets such as data centres, new energy infrastructure and student housing as indicators of the sector’s direction.

This picture does not mean that there is a single “winning sector” in European real estate investment. The real differentiation is emerging between assets supported by strong demand, limited supply, appropriate infrastructure and sustainable income generation, and assets that appear attractive solely because of their low price.

WHAT DO INSTITUTIONAL INVESTORS LOOK FOR IN REAL ESTATE?

For institutional investors, the current value of a plot, building or commercial property remains important. However, investment decisions are now made following a multi-layered assessment. The main areas of evaluation are:

• Income resilience and tenant quality: The duration of lease agreements, the tenant’s financial strength, vacancy risk and income growth potential.
• Transport and logistics access: Connections to motorways, railways, ports, airports and urban distribution networks.
• Energy capacity: Grid connection, security of supply and capacity allocation, particularly for energy-intensive uses such as data centres, manufacturing and cold-chain facilities.
• Digital infrastructure: Fibre access, data connectivity, latency and the requirements of technology-focused occupiers.
• Regional economic depth: Workforce, population movements, the industrial ecosystem, commercial activity and public investment.
• Building quality and conversion potential: Energy efficiency, resilience to climate risks, technical standards and adaptability to different uses.
• Liquidity and exit scenario: The potential future buyer base, access to financing and the depth of investor demand.

This approach examines not only the property’s current price, but also the economic function it could perform in the future and the extent to which it can adapt to changing conditions.

KEY ASSET GROUPS: THERE IS NO SINGLE WINNER

LIVING-SECTOR REAL ESTATE

In Europe, living-sector assets such as housing, student accommodation, senior living facilities and rental housing platforms maintain a strong position in institutional investment volumes due to demographic needs and supply shortages. The investment thesis is based not only on population growth, but also on the need for affordable housing, management quality and long-term rental demand.

DATA CENTRES

The growth of artificial intelligence, cloud services and the digital economy has made data centres one of the most closely monitored asset groups of 2026. However, data centre investment is not simply a matter of finding suitable land. Criteria such as energy connection, grid capacity, cooling capability, fibre infrastructure, permitting processes and data sovereignty play a decisive role in location selection.

CBRE’s European Data Centres Outlook forecasts that, despite more than 750 MW of new capacity expected in Europe in 2026, vacancy rates could fall to historically low levels because of grid constraints and strong demand. This shows that access to energy is no longer merely an operating cost, but a direct criterion of real estate value and project feasibility.

LOGISTICS AND INDUSTRIAL REAL ESTATE

Despite the normalisation of e-commerce, supply-chain resilience, nearshoring, urban distribution and manufacturing infrastructure continue to support demand for logistics real estate. Investor interest, however, is not distributed equally across all warehouses. Facilities with modern technical standards, proximity to major transport networks, access to labour and strong energy infrastructure are viewed more favourably.

CBRE’s 2026 European Logistics Outlook indicates that new supply is progressing more cautiously and that logistics and data centre developers are competing more intensely for suitable land, energy and construction capacity. The concept of a “logistics location” has therefore become too multidimensional to be explained solely by proximity to a motorway.

WHY IS THE CONCEPT OF A STRONG LOCATION BEING REDEFINED?

In the past, a central location could be considered a significant advantage in its own right for many types of real estate. Today, however, a strong location is assessed as a combination of measurable infrastructure and demand indicators that vary according to the intended use.

• Access to transport networks and major trade corridors
• Connection to industrial, logistics and supplier ecosystems
• Energy capacity and grid reliability
• Fibre and data connectivity
• Access to a skilled workforce
• The direction of population, income and commercial activity
• Zoning plans, public investment and implementation schedules
• Climate, environmental and technical suitability risks

For this reason, two districts within the same city, or even two parcels along the same development corridor, may produce entirely different investment outcomes. This is precisely where the selectivity of institutional capital begins: the analysis focuses not on the city name, but on the asset’s actual economic function and feasibility.

WHAT DOES THE TRANSFORMATION IN EUROPE MEAN FOR TÜRKİYE?

The change in approach across Europe provides an important reference point for domestic investors in Türkiye, Turkish investors living abroad and foreign investors. Although Türkiye’s industrial zones, logistics corridors, production capacity and regional connections offer significant potential, this potential is not distributed evenly across the country or within individual cities.

For this reason, before asking “which city will rise?”, the following questions should be answered in an investment decision:

• Which sectors generate economic demand in the region?
• At what implementation stage is the planned transport, energy or industrial investment?
• Are the development rights, permitted use and construction conditions compatible with the investment scenario?
• Is there a difference between comparable asking or sales prices and the asset’s actual transactionability?
• What is the asset’s capacity to generate income, be sold or be converted to a different use?
• Do official statements, field data and market indicators confirm one another?

An attractively priced property may remain illiquid for a long period if it is not supported by infrastructure and demand. Conversely, an asset that appears more expensive may offer a more balanced investment profile through strong rental demand, limited supply and verifiable development dynamics. The determining factor is not whether the price is low or high, but which data can explain that price.

IS DATA OVERTAKING PRICE?

Price is one of the fundamental inputs in real estate investment, but it does not explain investment quality on its own. Today, data is becoming the framework used to test whether a price is justified.

• Title deed and ownership data: Shareholding structure, annotations, encumbrances and legal limitations on use.
• Zoning and planning data: Land-use function, floor-area ratio, building height, plan notes and potential plan amendment processes.
• Valuation and market data: Completed transactions, rent levels, vacancy rates and adjustments to comparable properties.
• Infrastructure data: Transport, energy, water, fibre and logistics connections.
• Economic and demographic data: Number of businesses, employment, population movements, income levels and commercial density.
• Implementation and timing data: The announced project’s budget, tender, permits, construction stage and actual progress.

Assessing these indicators together does not eliminate investment risk completely. It does, however, reduce incorrect assumptions, enable alternative scenarios to be compared and help long-term opportunities to be identified earlier.

ANADOLU PROPERTIES ANALYSIS: HOW SHOULD ESKİŞEHİR BE ASSESSED?

With its organised industrial zones, universities, transport connections and skilled workforce, Eskişehir is one of Türkiye’s important manufacturing centres. The rare earth element studies in Beylikova constitute a separate development area that requires the city to be monitored in terms of strategic resources and advanced technology manufacturing.

The Ministry of Energy and Natural Resources’ current information page states that a pilot facility has been established at the Beylikova site for rare earth oxide recovery technology. The Ministry’s statements in 2026 also emphasise the objective of moving to industrial-scale production. These developments are strategic indicators that should be monitored in regional industrial and infrastructure planning.

Nevertheless, the announcement of a mining or industrial project does not mean that all surrounding properties will automatically appreciate in value. For an investment effect to emerge, the project’s implementation schedule, environmental permits, energy and transport investments, supply-chain connections, employment model and the specific sub-regions in which it will generate real demand must be analysed together.

For Eskişehir, the correct approach is not to assume broad value appreciation based on a headline, but to verify the extent to which the development in Beylikova connects with the city’s industrial, logistics, energy, workforce and commercial real estate layers. At Anadolu Properties, our investment assessments prioritise an approach that combines official data, valuation findings, field knowledge and regional development dynamics rather than short-term expectations.

THE CORE DYNAMIC BEHIND VALUE

The changing preferences of institutional capital in Europe show that the new era in real estate investment cannot be explained solely by price corrections. The assets that will stand out in the future will not be the cheapest ones, but those whose demand, income model, infrastructure and conversion capacity can be verified.

For Türkiye, the opportunity lies not in copying European asset classes exactly, but in applying the same analytical discipline to local markets. A sound investment decision requires more than following the popularity of a region; it requires the ability to assess that region’s economic function, implementation risks and long-term resilience through data.

Mustafa Yılmaz

CEO – Anadolu Properties

Europe–Türkiye Investment Bridge