25 March 2026, Amsterdam – The March INREV Consensus Indicator fell to 54.7, down from an all-time high of 59.4 in December 2025, as recent geopolitical developments prompted a sharp reassessment of near-term expectations. The drop came even as the Q4 2025 INREV Quarterly Fund Index posted its strongest return of 2025 at 1.24%. The results present a striking contrast between robust Q4 returns and a notable deterioration in investor sentiment.
Q4 2025 performance reaches its strongest point of the year
The Q4 total return of 1.24% was up from 1.02% the previous quarter, bringing the annualised 2025 performance to 4.43%. All main sectors, except office, delivered their eighth consecutive quarter of positive performance, with residential funds leading the Q4 results with 1.77% and retail funds with 1.60%.
Risk perceptions shift markedly
However, perceived investment risk rose to a net 26% in March 2026, reversing the net 7% reduction in risk expectation recorded in December 2025. Four of the five subindicators in the INREV Consensus Indicator fell sharply this March. Investment liquidity sentiment fell from 61.4 to 51.6, with 18% of respondents on a net basis citing increased concern about direct market liquidity in the coming quarter. The economic subindicator fell from 53.8 to a record low of 42.4. This is by far the lowest reading recorded for this subindicator since tracking began in March 2023. Rising concerns over the economic outlook led to respondents expecting rising inflation to weigh on real estate performance over the next 12 months.
Financing conditions hold firm
Financing was the only subindicator to improve, albeit slightly, edging up to 70.4 and the only reading above 70. The share of respondents reporting improved availability from traditional bank lenders rose to 43%, the highest since tracking began, with alternative lender sentiment still strong at 39%. Almost a third of participants continued to report higher loan-to-value (LTV) ratios and looser covenant structures on a quarter-on-quarter basis.
Unexpected boost for retail
Retail ranked as the most preferred sector at 23% net sentiment, with student housing in second place with net 12%. Senior living, residential and offices followed, at 9% each. Residential's reading is its weakest since December 2022 and well below its long-term average of 26%. Industrial and logistics turned negative at -3%, while office sentiment improved from -4% in December to 9%.
Southern Europe still shining
Net sentiment toward Spain reached 39%, matching the record high of March 2025 and well above the long-term average of 10%. Spain posted the highest total return of any market in Q4 at 2.69%, driven by retail returns of 4.73%. Italy and Portugal retained positive sentiment at 9% and 3% respectively. France recorded the weakest net sentiment at -15%, the lowest since the survey began. Germany and the Nordics held ground, both with a net sentiment of 15% this March.
Iryna Pylypchuk, Director of Research and Market Information at INREV, commented: “Underlying market conditions haven’t changed – Q4 delivered the strongest returns of the year, and letting and operations, and financing conditions remain the most resilient of all the subindicators.
What has changed is the external context, and the speed with which that has fed through into sentiment is striking. A record low on the economic subindicator within a single quarter indicates just how quickly confidence can shift when geopolitical uncertainty enters the equation. To what extent this will dampen economic growth, disrupt interest rate path and trigger inflation will hold the clue if this is a temporary recalibration or whether it becomes the trigger for a more substantive and sustained reassessment of the European real estate investment landscape.”