European CRE values up for fifth quarter, office still lags

According to Altus Group's Q3 2025 Pan-European dataset analysis, commercial property values across Europe rose for the fifth consecutive quarter.

European property - Altus Group

The property values increased by 0.6% in Q3 2025, matching Q2 gains, and showing a 2.9% year-over-year increase from Q3 2024. This growth is largely driven by stronger cash flow fundamentals (+2.6%) and improved investor sentiment due to lower interest rates.
While the overall market is trending positively, the office sector continues to struggle with the lingering effects of the pandemic. Despite a 0.5% increase in Q3 2025, it remains at the bottom of the sector rankings, having experienced significant value declines (4.6% in the UK and 6.6% across Europe year-over-year). However, there are signs of recovery, with cash flow appreciation improving to 0.7% in Q3, supported by a 3.4% increase in in-place rents. This positive movement is somewhat offset by increasing yields, indicating continued investor caution.
Regionally, France was a standout performer, with property values rising by an impressive 6.3% year-over-year. The UK office sector outperformed the European average, seeing a 1.2% rise in values compared to Europe's 0.5%, thanks to favourable yields and strong rental gains. In contrast, Germany saw a -0.6% change year-on-year for offices, and the Netherlands a modest 0.2% increase.
Residential was the strongest performer among the four main sectors, with values increasing by 0.7% over Q2 2025, boosted by robust cash flows and lower valuation yields.
The industrial sector saw a below-average 0.5% increase, with slowing cash flow appreciation. 
Retail values increased by 0.6%, driven by strengthening cash flows and a 0.5% rise in market rents, despite expanding yields.
Phil Tily, senior VP at Altus Group, commented: “For a fifth consecutive quarter, we appear to be witnessing a measured yet sustained improvement in values across all sectors in Europe. While no single sector is leading the rebound, the broad-based nature of the gains gives us confidence that the CRE recovery is taking hold.”
The Q3 2025 aggregate dataset included Pan-European open-ended diversified funds, representing €28 bn in AUM and covering 16 countries.