European property values rise 4.3% in 2014 - CBRE

Property values across all asset classes in Europe grew for four consecutive quarters in 2014, the first time they have done so since 2007, according to CBRE’s latest European Valuation Monitor.

In total, CBRE’s All Property Capital Value Index registered a 4.3% rise in 2014, with the UK as the strongest performer at 12.9%.

Values in southern Europe rebounded in the second half of the year to see a 3.6% rise year-on-year, and there were also positive levels of growth in France and Germany at 3.3% and 2.7% respectively.

The industrial sector was the best performing asset class with values rising 8.5% in 2014, followed by offices (3.9%) and retail (2.5%).

Central and Eastern European (CEE) markets continued to see property values fall quarter-on-quarter (a negative 0.4% in Q4) led by a decrease in the office and retail markets. This was largely due to older stock coming under pressure from new developments in the region. However, industrial markets in the region saw an increase in values of 3.8% in Q4 and were up by 9.1% year-on-year.

'Equivalent yields have compressed across the full spectrum of real estate quality for the first time since 2007, suggesting that investors are now looking at all sectors of the commercial real estate market and although their focus remains on prime they are increasingly considering assets further along the risk curve, moving into secondary and more peripheral markets,' commented Matthew Edmonds, analyst, EMEA Valuation and Advisory, CBRE.