It’s been a tough few years for property investors, but the latest data suggests the European market is finally turning a corner.

Values are on the Up

According to Cushman & Wakefield, values are rising across all sectors for the second quarter in a row. Here’s the breakdown:

• High Street: Values rose by 2.3% over the last six months. This is a welcome sign for struggling retail spaces.
• Logistics: Despite a 12.4% dip from its peak, logistics saw a 1.4% rise in the first half of 2024. E-commerce continues to drive demand for warehouse space.
• Offices: While offices still haven’t recovered fully from the 21.8% drop, they’re showing signs of life with a 0.6% increase in value.

Rents are Climbing Too

Not only are values going up, but rents are also rising across all sectors. Prime rents increased by 0.8% in the second quarter, marking the sixth consecutive quarter of growth for offices, high streets, and logistics.

Prime Office Yields are Back

Prime office yields have climbed back to 5.53%, which is a significant jump from the low of 3.87% in the first quarter of 2022. This figure hasn’t been this high since mid-2014!

What Does This Mean for Investors?

Nigel Almond, a top data analyst at Cushman & Wakefield, sees a clear trend emerging. He says that the recovery is strongest for logistics and high streets, suggesting that these sectors are leading the charge. Office markets are close behind, and slowly but surely, they’re starting to catch up.

While this is promising, Almond cautions that not every property will recover at the same pace. Prime locations and top-notch buildings will likely see faster growth, while those with flaws or less desirable locations will take longer.

The Bottom Line

The European commercial property market is showing signs of recovery, with rising values and rents across all sectors. This could be a great opportunity for investors who are looking to capitalise on the upward trend. However, it’s important to remember that not all properties will experience the same level of growth. Do your research and choose wisely!