In 2025, Israel reached a record-high level of real estate investment across Europe. According to recent estimates by analysts from JLL and CBRE, total investments from Israeli companies and funds in European real estate climbed to €2.1 billion, marking the highest figure on record. This surge reflects not only economic motives but also a strategic shift in how Israeli capital views real estate as a resilient and long-term asset class.
Economic and Geopolitical Context
The economic challenges of recent years — including rising interest rates, currency volatility, and regional instability in the Middle East — have pushed capital beyond national borders. Institutional investors from Israel, primarily pension funds, insurance groups, and large developers, are increasingly seeking secure and profitable assets abroad. Europe, with its regulated markets, stable rental yields, and diverse asset classes, has become a natural investment destination.
Where the Money Is Going
Netherlands: Betting on the Hotel Sector
The hospitality sector emerged as the most active investment category in 2025. In the Netherlands, Israeli-based Fattal Hotel Group, in partnership with leading insurers such as Migdal, Menora Mivtachim, and Phoenix, acquired a portfolio of 14 hotels across major Dutch cities for over €320 million. An additional €45 million is earmarked for renovations, significantly boosting Fattal’s competitive edge in Western Europe.
Germany: Focus on Rental Housing and Offices
Israeli funds are expanding their footprint in Germany, particularly in Berlin, Hamburg, Frankfurt, and Leipzig. More than €180 million has been allocated to the residential rental sector in the early months of 2025. There is also sustained interest in grade-A office buildings, especially in financial districts.
One notable example is the acquisition of an office complex in Frankfurt’s Gateway Gardens district for €88 million — approximately 30% below pre-COVID valuation. Analysts describe this as an opportunistic investment, highlighting Israeli funds’ ability to act decisively during market corrections.
United Kingdom: London Remains a Magnet
Despite ongoing Brexit-related uncertainty, London remains a top target. In 2025, Israeli investors poured approximately €370 million into the UK capital, mostly in premium rental housing and commercial office properties. Areas like Camden, Westminster, and Southwark attracted the most attention.
Logistics & E-commerce: Warehousing Leads the Way
Industrial and logistics properties continue to dominate Israel’s strategic interest. As e-commerce expands, the need for modern distribution centers remains strong. In 2025 alone, over €500 million was invested in logistics assets in Poland, Germany, Belgium, and the Czech Republic.
In April, a Tel Aviv-based fund acquired a 42,000 m² industrial park near Wrocław, Poland, for €65 million, securing a 10-year lease agreement with a major online retailer.
Eastern Europe and Georgia: Exploring Alternative Markets
In addition to core Western European destinations, Israeli investors are turning their attention to Georgia, Poland, Romania, and the Czech Republic. The Black Sea resort city of Batumi remains a top choice. In Q1 2025 alone, Israeli nationals acquired over 750 properties, investing upwards of €60 million in apartments and condo-hotels. The appeal lies in both high yields (10–12% annually) and the strategic value of acquiring foreign residency and diversified income.
Investment Profile and Ownership Strategy
Israeli investors typically adopt a long-term holding strategy, with investment horizons ranging from 7 to 10 years. Structures such as SPVs (Special Purpose Vehicles) registered in Cyprus, Luxembourg, or the Netherlands are common, enabling tax optimization and regulatory compliance within the EU.
Most transactions are carried out by institutional players, including pension funds, insurance groups, and family offices. Their primary goal: stable returns of 5–7% annually, combined with capital preservation in politically and economically stable jurisdictions.
Sector Preferences
| Sector | Share of Total Investment | Avg. Return |
|---|---|---|
| Hotels & Apart-Hotels | 40% | 7–10% |
| Logistics & Warehousing | 24% | 6–7% |
| Residential Rentals (PRS) | 17% | 5–6% |
| Office Properties | 13% | ~5% |
| Alternative Assets | 6% | 6–8% |
Notable Deals in 2025
- Netherlands Hotel Portfolio: Fattal Group completed a €320M acquisition of 14 hotels in Amsterdam, Rotterdam, and The Hague, followed by a €45M renovation budget.
- Frankfurt Office Complex: A group of Israeli investors bought a prime business park for €88M at a discount.
- Berlin Rental Housing: Phoenix Insurance partnered with Blackstone in a €110M portfolio of multi-unit residential properties.
- Polish Logistics Hub: An Israeli logistics fund financed a €65M distribution center near Warsaw.
Expert Commentary
Nadav Ben Avraham, Director of Global Real Estate Investments at JLL Israel, states:
“In 2025, Israeli investors are acting with scale, precision, and professionalism. Europe offers an unmatched balance of risk and return — something Israeli institutions are capitalizing on.”
Marian Brandt, senior analyst at Colliers Europe, adds:
“Israeli funds are often first movers, particularly in logistics and hospitality. Their decisiveness and willingness to co-invest make them ideal partners in today’s competitive environment.”
Outlook for 2026
Analysts project continued momentum. According to EREA, total investments from Israel could reach €2.4–2.5 billion by the end of 2026. Supporting factors include:
- Stabilization of interest rates across the Eurozone
- Expansion into Scandinavian and Baltic countries
- Growing demand for build-to-rent and smart logistics
- Rising investment in data centers and life sciences campuses
Conclusion
The record-breaking €2.1 billion in Israeli investment in European real estate in 2025 is no coincidence — it marks a clear trend toward global portfolio diversification and long-term strategic positioning. Israeli capital is no longer exploratory; it’s transformative.
With strong institutional backing, sector-specific expertise, and long-term vision, Israeli investors are poised to play an even larger role in shaping Europe’s real estate landscape. For Europe, this capital brings liquidity, innovation, and resilience. For Israel, it delivers predictable returns and a vital foothold in the heart of global real estate.
