European commercial property values showing signs of recovery 

The European commercial property sector appears to be on the road to recovery with values declining by just 0.07% in Q2 2024, according to the latest data from Altus Group.

The company’s analysis of Q2 pan-European commercial property data showed yields continued to move out for the ninth consecutive quarter putting further downward pressure on values, although at a moderating pace.

Low single-digit yield increases were recorded across all sectors and accounted for a -0.7% value change across the dataset. Factoring in the ongoing slight improvement in cashflows, appreciation levels turned positive in each of the main sectors except offices.

Phil Tily, senior vice president at Altus Group, said: “Property values across the pan-European valuation dataset remained largely unchanged in Q2 2024, registering a slight sequential decline of only -0.06% over Q1 2024. 

“This marks the smallest downward revision since values began declining in Q3 of 2022. Over this eight-quarter period, the property values within this dataset have dropped by a total of 16.5%. The minimal decrease in Q2, coupled with the recent interest rate cut, points to more stability ahead as value declines are moderating significantly.”