European commercial property values rise again

Altus Group has reported a further increase in Pan‑European commercial property values in Q2 2026, marking the eighth consecutive quarter of positive appreciation across open‑ended diversified funds

Altus Group: Pan European valuation dataset. 

The latest dataset, covering approximately €30 billion in AUM across 16 countries and spanning industrial, office, retail and residential sectors, recorded a 0.3% uplift in values over the quarter.

While appreciation moderated from the 0.6% gain reported in Q1, values remain 1.9% higher than a year ago. Altus Group notes that performance continues to be driven primarily by improving cashflow fundamentals including rising market and contract rents, modest occupancy gains and lower capital expenditure assumptions which have offset the impact of ongoing yield expansion. Valuation yields continued to move outward in Q2, tempering overall growth.

Phil Tily, Senior Vice President, Valuation Advisory at Altus Group, said Q2 marks two full years of positive appreciation across Pan‑European diversified funds, supported by healthy operating fundamentals. He added that the pace of growth moderated largely due to the office sector levelling off, but the market continues to demonstrate resilience across major sectors.

Sector performance

Residential remained the strongest performer, with values rising 0.7% over the quarter. Although cashflow growth eased, continued rental increases supported the sector’s position as the top annual performer, with values up 3.3% year‑on‑year.

Industrial values rose 0.1% in Q2, reflecting slower rental growth and softer cashflow gains, partially offset by modest yield expansion. Annual growth stands at 1.8%, down from 2.8% in the prior period, signalling a cooling of momentum.
Office values were broadly flat, as limited cashflow growth and lower capex assumptions were outweighed by further outward yield movement. The sector remains the weakest performer, with annual growth of 0.8%, held back by Germany, the only region in the dataset to record a decline over the past year.

Retail values increased 0.5% in Q2, outperforming the all‑property average. Gains were driven primarily by yield‑related factors, with the sector being the only one to record yield contraction over the past year. Annual appreciation stands at 2.0%, ahead of both industrial and office.

The “other” property sector continued to outperform, with values rising 2.0% in Q2 and 6.5% year‑on‑year. Strong rental growth and sustained investor demand, particularly for student accommodation have driven both yield and cashflow performance well above the market average.