The Green Street commercial property price index, produced by real estate research firm Green Street Advisors, increased by 1.1% this past quarter, boosted by the rallying industrial and office sectors in Europe.
The increase in the index, which measures pricing of a broad swath of pan-European commercial properties, saw the stronger asset classes help balance out the ongoing fragility of the retail sector.
According to Green Street, industrial values are showing strength and potentially trending slightly above pre-Covid levels. After a 6% decline from the pre-Covid peak in April, office values are proving resilient. Retail values have yet to find a bottom, as an onslaught of retailer bankruptcies stymie investor interest.
Peter Papadakos, managing director at Green Street Advisors, said: 'We’re still in the early stages of assessing the full impact the pandemic has had on pan-European commercial property values, but down about 5% from the prior peak is still a good betting line.
'Many countries are well into reopening their economies, and, while transactions are limited, there is increasing evidence that volumes are recovering.
'Meanwhile pricing trends that were already in place pre-Covid continue unabated. Industrial assets are garnering strong investor interest, while most participants are having trouble getting comfortable with the risks in the retail sector at asking prices.'
Green Street's pan-European real estate analytics platform covers 25 of the most liquid European real estate markets across the industrial, office, and retail 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.
