The European Real Estate Forum – EREF
Real Estate in the real economy

Key facts

Real estate plays a fundamental role in the real economy, serving as the backbone for businesses, communities, and families. It provides the built environment essential for housing, offices, retail spaces and industrial facilities, enabling society to function and thrive.
Real estate diversifies investment portfolios and delivers the returns needed by institutional investors, such as pension funds and insurance companies, to fund their liabilities. These long-term investments provide a critical contribution to the real economy in Europe. 
A Powerful Economic Engine
European institutional investors and managers hold nearly € 2.9 trillion of commercial property as investment. In 2023, the sector contributed €523 billion in Gross Value Added (GVA), approximately 2.9% of the total EU economy. This is more than the combined contributions of the auto manufacturing and telecommunications sectors. The real estate industry directly employs 4.4 million people, equivalent to banking, underscoring its significant role as a job provider. Spending on new commercial buildings (excluding housing) and refurbishing and developing existing ones accounts for 11% of all fixed capital investment in the EU and UK economies.
Meeting Housing Needs
The housing sector within real estate is particularly noteworthy. Institutional investment in housing has grown sharply, reaching €573 billion in 2023, almost quadrupling since 2013. This investment addresses growing demand for affordable and sustainable housing solutions, including senior living, student accommodation, and affordable private rental housing. These initiatives contribute to social equity while offering stable returns to investors, driven by structural trends and the need for sustainable housing options.
Sustainability Goals
Real estate also plays a central role in addressing climate change. The built environment is responsible for 37% of Europe’s carbon emissions, making it a priority for decarbonisation. Institutional investors are leading the charge, aligning their strategies with the UN Sustainable Development Goals. Retrofitting existing buildings and adopting sustainable construction practices are essential to meet the EU's ambitious net-zero targets by 2050. The sector's commitment to sustainability not only reduces environmental impacts but also enhances housing affordability through lower energy costs.
Enabling Business Growth
The flexibility offered by commercial real estate through leasing arrangements further supports business growth. With €2.9 trillion in leasable commercial spaces, companies, especially small and medium-sized enterprises (SMEs), can allocate capital more efficiently and scale operations as needed.
A Cornerstone of Progress
Real estate is far more than bricks and mortar – it’s the cornerstone of economic activity, innovation, and sustainability. By creating jobs, driving innovation, and addressing societal challenges like housing and climate change, the real estate investment sector ensures that businesses and communities can grow and prosper in a rapidly changing world.