The Southern European real estate market continued its strong recovery in 2026 H1, with combined investment volumes across Italy, Spain and Portugal reaching 18.2€Bn, representing a 39% year-on-year increaseand confirming renewed investor confidence across the region. Activity increasingly concentrated on operational and alternative asset classes, with Retail, Hospitality and Living attracting the largest share of capital.
Retail re-emerged as one of the strongest performers of the half-year, buoyed by renewed appetite across the High Street and Shopping Centre segments and by a return of large-scale transactions, while Hospitality remained highly active on sustained investor conviction and continued appetite for value-add and repositioning opportunities. Living further consolidated its position as a core allocation, supported by growing investor appetite for operational, platform-based exposure across the region's living sectors.
Industrial & Logistics benefited from robust occupational fundamentals despite limited prime product, while Office investment stayed selective, favouring prime assets and conversion-led strategies. The rising allocation to Data Centres further reflects a focus on future-oriented and operationally intensive asset classes, while the persistent shortage of high-quality product continues to sustain competition and reinforce Southern Europe's appeal to both domestic and international capital.
