Commercial Property Price Index®
Pan-European Commercial Property Price Index
Looking for the Bottom
London, 5 January 2024 – The Green Street Commercial Property Price Index moved into positive territory (+1%) in December for the first time last year, down 11% for the whole of ’23. The index, which measures pricing of a broad swathe of Pan-European commercial properties, sits c.24% below its ’22 peak. The residential (+3%) and industrial (+2%) sectors drove the uptick in bid pricing as buyers’ sentiment improved following the decline in borrowing rates. Office prices were steady in December after underperforming (-19%) in 2023. The retail bid is steady too as confidence on the income outlook gains further ground.
“Whilst deal volumes remained thin across all four core property sectors in the last quarter of 2023, pricing levels seem to be nearing a floor after 18 months of write-offs”, said Marie Dormeuil, Analyst at Green Street. “The recent rally in debt markets implies that there is good value in commercial real estate at private-market pricing, while REIT share prices signal that direct market property spot values are fair. Simultaneously, operating fundamentals across three of the four core property types – excluding office – should result in inflation-beating net rental income growth over the next 24 months, further supporting the view of a stabilisation in bid pricing.”
Green Street Commercial Property Price Index®
Green Street Commercial Property Price Index
Indexed to 100 in August 2007
Indexed to 100 in September 2007
Core Sector Average is equally-weighted between the Industrial, Office, Residential, and Retail sectors.
Change in Commercial Property Values
Amount property values have increased over this period
January 5, 2024
What makes our Commercial Property Price Index® unique?
There are significant differences between the Green Street CPPI® and other indices that track commercial property prices. Green Street's CPPI® is appraisal-based. Appraisal-based indices are only as good as the valuation estimates used to construct them, and Green Street has long devoted sizable resources to deriving accurate estimates of the values of the properties owned by REITs. Most other indices are transaction-based.
Green Street's Pan-European Real Estate Analytics platform covers 25 of the most liquid European real estate markets across the industrial, office, retail, and residential property sectors. The Commercial Property Price Index is a time series of unleveraged property values across these sectors and markets, and captures the prices at which commercial real estate transactions are currently being negotiated and contracted. Features that differentiate this index are its timeliness, its emphasis on average institutional quality properties, and its ability to capture changes in the aggregate value of the commercial property sector.