Commercial Property Price Index®

Pan-European Commercial Property Price Index

April 7, 2025

In Search of Direction

London, 7th April 2025 – The Green Street Commercial Property Price Index, which measures pricing of a broad swathe of Pan-European commercial properties, was stable in the first quarter of ’25, leaving overall pricing inline with its pre-GFC peak. Industrial, residential, and data centre assets outperformed, climbing c.1% QoQ thanks to gradual income expansion and stable yields. Meanwhile, office pricing retreated ~60 bps as negative embedded rent growth in B/B+ properties dragged cash flow lower. Retail and hotel pricing was largely stable, with the former’s pricing benefitting from re-based rents and the latter enjoying healthy – albeit decelerating – rental rate growth.

“Property prices have held steady year-to-date, but such a sense of stability is now up in the air following the unveiling of the U.S.’s Liberation Day policies.” said Marie Dormeuil, Senior Analyst at Green Street. “In the past few days, investors have been spooked by much higher tariff announcements than what was anticipated, and real estate equities have sold off somewhat, albeit they are outperforming other industries due to property’s relatively defensive nature. Property prices are unlikely to move much higher in the near term as the outlook for operating fundamentals has deteriorated given the real-time rising odds of a global recession. Yet, macro fears are simultaneously pushing inflation-adjusted “risk-free” yields lower, providing an important ballast for property cap rates even if we see our income growth forecasts needing to be revised lower in the months ahead.”

 

Take a look at our U.S. Commercial Property Price Index

How is our index different than others that track commercial property prices?

How is our index different than others that track commercial property prices?

Timeliness

Green Street's Commercial Property Price Index® is a time series of unleveraged U.S. commercial property values that 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 high-quality properties, and its ability to capture changes in the aggregate value of the commercial property sector. Learn more.

Green Street's Commercial Property Price Index is a time series of unleveraged Pan-European commercial property values that 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.

Green Street Commercial Property Price Index®

Green Street Commercial Property Price Index

Indexed to 100 in August 2007

Indexed to 100 in September 2007

All Sector Average is equally-weighted between the industrial, office, retail, and residential sectors until April-24. From April-24 onwards, it represents a weighted average of residential (25.0%), industrial (20.0%), office (22.5%), retail (22.5%), hotel (7.5%), and data centre (2.5%).

View U.S. CPPI® View Pan-European CPPI

Change in Commercial Property Values

Amount property values have increased over this period

07 April 2025



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 based on frequently updated estimates of price appreciation of the property portfolios owned by the REITs in its coverage universe. Other indices are based on closed transactions or formal appraisals and reflect market prices from several months earlier.

Green Street's Pan-European Real Estate Analytics platform covers 30 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 quality properties, and its ability to capture changes in the aggregate value of the commercial property sector.

Institutional Quality

Institutional Quality

Average Institutional Quality

The index is based on Green Street's frequently updated estimates of price appreciation of the property portfolios owned by the REITs in its U.S. coverage universe. Since REITs own high-quality properties, the index measures the value of institutional-quality commercial real estate.

The index is based on Green Street's frequently updated estimates of price for the property portfolios of a typical commercial real estate investor. It is driven by the fundamental models maintained by the research team, which, in turn, are driven primarily by changes in market cap rates and net rental income.

Timely

Timely

Timeliness

Our index reflects changes in commercial property values as soon as we hear about them. That's one of the benefits of Green Street’s CPPI®; we don’t have to wait for deals to close. The index is published monthly and released within days of month-end, whereas other indices have a sizeable lag.

The Green Street index value is based on where commercial real estate would transact today. Other indexes, based on either closed transactions or formal appraisals, may reflect market prices from many months earlier.

Value-Weighted

Value-Weighted

Asset Value Weighted

We place more weight on high-quality properties, e.g. a New York skyscraper has a much greater impact than a suburban strip mall. Because our CPPI® is value-weighted, it measures what’s happening to real estate prices in aggregate, similar to the Wilshire 5000 that measures what’s happening to the stock market in aggregate. Most property indices are equally-weighted.

Each sector index is created by GDP weighting individual market indexes. The sector indexes are then equal weighted to create the Pan-European Commercial Property Index. Akin to familiar stock price indexes (e.g., S&P 500), GDP value weighting provides a gauge of aggregate (as opposed to average) values. Equal-weighted indexes, by contrast, put the same emphasis on a Dusseldorf industrial building as they do a trophy London office building.