Commercial Property Price Index®
Pan-European Commercial Property Price Index
Bidding Adieu to the Ask
London, 7 July 2022 - The Green Street Commercial Property Price Index decreased by 10.3% during the second quarter of 2022. The index, which measures pricing of a broad swathe of Pan-European commercial properties, retreated as fixed income yields rapidly rose. Low starting yields in residential and cash flow uncertainty in office resulted in asset values falling ~9% and ~19%, respectively, while already-high yields in retail and strong income growth in industrial resulted in the two sectors realizing smaller declines.
“Commercial real estate asset values fell precipitously in the second quarter of this year,” said Peter Papadakos, Managing Director at Green Street. “Dearer debt costs and greater macroeconomic uncertainty are making it harder for commercial real estate investments to pencil. Failed transactions are becoming more prevalent as the bid-ask spread is widening and sellers have been reluctant to sell at the bid. At the sector level, industrial is best positioned with low starting vacancy rates and a backlog of tenant demand. Average-quality office remains the least attractive investment option even after reducing values ~20% due to the pending CapEx backlog. The current macro backdrop warrants caution in underwriting assumptions; based on our numbers, commercial real estate pricing in Europe tilts towards the expensive side of a fair range even after the aforementioned falls during the second quarter.”
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Green Street Commercial Property Price Index®
Green Street Commercial Property Price Index
Indexed to 100 in August 2007
Indexed to 100 in September 2007
Download CPPI® Report Download CPPI DataCore 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
7 July 2022