Commercial Property Price Index®
Pan-European Commercial Property Price Index
London, 12 April 2023 – The Green Street Commercial Property Price Index decreased by 6.7% during the first quarter of 2023. The index, which measures a broad swathe of Pan-European commercial properties, now sits 21% below its May '22 peak. The residential sector bore the brunt of the pain this quarter with a 10.4% price decline, although metros with above-average starting yields and limited rental regulation went relatively unscathed. Office investors returned to their post-Covid form as bids fell 9.5% amidst an uncertain economic and financing backdrop. Industrial and retail asset prices fared a bit better, falling only 4.8% and 2.0%, respectively. Resilient fundamentals buoyed the former whilst high cap rates dressed up the latter.
“The first quarter of 2023 failed to quell many of the anxieties that plagued markets last year,” said Peter Papadakos. “In fact, some might say that it has only introduced new ones. A regional banking crisis in the U.S. teleported to Europe shortly thereafter, raising newfound fears over the stability of our financial system and the future of lending standards. Higher interest rates are proving to be an enigmatic challenge for all corners of the economy, and commercial real estate is no exception. Many investors have opted for a ‘wait-and-see’ approach to capital allocation, which has resulted in persistent bid-ask spreads and another leg down in property prices. Pockets of optimism do, of course, exist within a curated selection of sectors and markets. Positive embedded reversion potential, a reliable tenant roster, and the ability to capture inflation-sized indexation rent bumps are a few attributes in particularly high demand. Said differently, cash flow is king once again.”
Take a look at our U.S. Commercial Property Price Index
How is our index different than others that track commercial property prices?
Green Street Commercial Property Price Index®
Green Street Commercial Property Price Index
Indexed to 100 in August 2007
Indexed to 100 in September 2007Download CPPI® Report Download CPPI Data
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
April 12, 2023
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.