European property values post modest first quarter gains
Commercial property values across Europe rose by 0.8% in the first quarter of 2025, marking the third consecutive quarter of growth, according to new data from Altus Group.
Based on €29 billion in assets across 17 countries, the report shows a cautious but broad-based recovery, led by steady gains in residential and industrial sectors, while the office market remains mixed. The United Kingdom marginally outperformed the continental average in office valuations, with a 0.9% increase during the quarter, although values remain 4.4% lower year-on-year — the sharpest annual decline among Europe’s major markets.
Altus Group, a Canadian real estate intelligence and advisory firm, said European residential real estate was the strongest performer in the first quarter, recording a 1.5% increase, supported by stable income profiles and robust rental demand. The Netherlands led all markets with a 5.1% rise in residential values, reflecting strong investor appetite and tight supply.
Industrial properties continued their upward trajectory, with a 0.8% gain across the region. Italy and Spain were the top-performing markets in the industrial segment, buoyed by strong tenant demand and limited new development.
Office values rose by 0.8% on average across Europe. France recorded the most significant quarterly increase at 3%, while Germany posted a 0.3% gain.
European retail assets rose 0.5% over the quarter, with supermarkets and high street retail outperforming shopping centres. Student accommodation assets delivered a 3% quarterly gain in the alternatives category, ahead of hotels and other non-core asset classes.
“We’re encouraged to see the slow but steady growth across all major property sectors for the third consecutive quarter, reinforcing cautious optimism in the European real estate market,” said Phil Tily, senior vice president at Altus Group. “The resilience of residential and industrial assets reflects ongoing investor appetite for sectors underpinned by strong cashflows and rental growth.”
Altus noted that recovery remains uneven, particularly for legacy office stock and secondary locations. Capital allocation remains selective, with the firm reporting a clear bias towards assets with long-term income stability, strong locations, and ESG alignment. While market sentiment has improved as interest rates appear to have peaked, Altus said structural pressures continue to shape performance across geographies and sectors.
