European commercial property values rose 0.63% in Q3 2024, marking the first positive movement in values in two years, according to the latest data from Altus Group.
The increase follows a minimal decline of just 0.07% in Q2 2024, marking an end to an eight-quarter period of consecutive value write-downs totalling 22.5%.
Reversing last quarter’s write-down, office values turned positive recording a 0.5% increase. However, cashflows were lowered, holding back value growth by -0.2%, mostly due to an increase in rental concessions and an escalation in the level of operating expenses. In the UK, Altus’s data shows office values were written down by -2.6%, with the market particularly impacted by yield increases and low in-place rents.
Retail was the best performing sector recording positive appreciation in all sub-property types. Overall, retail values were up 1.26% over the quarter. Compared with the previous quarter, the industrial sector had a relatively quiet Q3 and was up just 0.4% over the quarter.
Phil Tily, senior vice president at Altus Group, said: “The third quarter marked the first time in two years that the movement in property values across the pan-European valuation dataset turned positive. We are seeing green shoots emerge across all main property sectors which, combined with last week’s second European Central Bank rate cut this year, points to greater stability ahead.”
