Altus Group releases its Q2 2025 Pan-European Dataset Analysis on CRE valuation trends

Each quarter, Altus Group centralizes and aggregates CRE valuation data for the European market, pulling insights into the factors driving commercial property valuations. The Q2 2025 aggregate dataset included Pan-European open-ended diversified funds, representing €29 billion in assets under management. The funds cover 17 countries and primarily span the industrial, office, retail and residential property sectors.

For the fourth consecutive quarter, commercial property values across the Pan-European valuation dataset increased in Q2 2025, rising 0.6% over Q1 2025 and 2.8% year-over-year from Q2 2024. The pace of growth moderated slightly as cashflow gains tapered to 0.5% - its lowest level in four quarters. Even so, the steady yield impact reflects improving investor sentiment in a lower interest rate environment.

“Four consecutive quarters of valuation improvements is a clear sign that market fundamentals are stabilizing across Europe,” said Phil Tily, Senior Vice President at Altus Group.  “Despite mixed macroeconomic conditions across the region, the CRE valuation trends point to a real estate market that is regaining its footing and gearing up for the next phase of the cycle.”

Key highlights by sector include:

• Residential: The residential sector remained the top performer of the four main sectors in Q2 2025 with a 0.9% value increase over Q1 2025. Values benefitted from stronger cash flow fundamentals despite an increase in yields.

• Industrial: The industrial sector maintained its ranking just below the residential sector with Q2 2025 values up 0.8% over Q1 2025. Cashflow appreciation slowed in Q2 2025 while yield impact remained positive for the quarter.

• Office: While yields continued to tighten in the office sector, cashflows in Q2 2025 remained largely unchanged resulting in a relatively muted 0.3% value increase over Q1 2025.

• Retail: The retail sector experienced another subdued quarter, with Q2 2025 values increasing by just 0.3% over Q1 2025. With very little improvement in rents across the sector, an increase in operating expenses resulted in a net reduction in cashflow levels.

• Other: Outside of the main sectors, values of student accommodation assets increased by 1.9% over Q1 2025.

To download a review of the sector trends by asset class, please click here.