Altus Group publishes Q2 2024 pan-European analysis of commercial real estate valuation trends

Minimum property value write-offs in the Altus pan-European valuation dataset in Q2 2024

LONDON, Aug. 19, 2024 (GLOBE NEWSWIRE) — Altus Group Limited (“Altus Group” or the “Company”) (TSX: AIF), a leading provider of asset and fund information to the commercial real estate (“CRE”) sector, today released its Q2 2024 analysis of its pan-European dataset on valuation trends in the European real estate market.

Each quarter, Altus Group centralizes and standardizes commercial real estate valuation data for the European market, providing insight into the factors that influence commercial real estate valuations. The Q2 2024 aggregated dataset included pan-European diversified open-end funds representing EUR 29 billion of assets under management. The funds cover 17 countries and primarily cover the industrial, office, retail and residential real estate sectors.

“Property values in the pan-European valuation dataset remained largely unchanged in Q2 2024, recording a small sequential decline of just -0.06% compared to Q1 2024,” said Phil Tily, Senior Vice President at Altus Group. “This is the smallest downward revision since values began to fall in Q3 2022. Over these eight quarters, property values in this dataset have fallen by a combined 16.5%. The minimal decline in Q2, combined with the recent rate cut, suggests greater stability going forward as value declines moderate significantly.”

Despite the European Central Bank’s 25 basis point cut in its key interest rate in June, yields continued to rise for a ninth consecutive quarter, putting further downward pressure on values, albeit at a moderate pace. Low single-digit yield increases were seen across all sectors, accounting for a -0.7% change in values across the data set. Given the ongoing modest improvement in cash flows, appreciation levels finally crossed the divide, turning positive in every major sector except offices.

Highlights for each sector include:

Industrial:continues to lead the performance charts, with a 0.5% increase in value compared to Q1 2024. Cash flow gains in the sector increased values by 1.1%, offsetting a relatively small negative impact on profitability of -0.5%.
Office:A slight downward revision to projected cash flows, along with a stronger than average increase in profitability, resulted in further write-downs, with values down 0.8% compared to Q1 2024.
Retail: Values turned positive in Q2, rising 0.2%, but with mixed results across property types. The best performers were warehouse and parks, up 3.1%, followed by supermarkets (0.3%). There were small write-downs across shopping centres (-0.6%) and high street assets (-0.1%).
Housing:A 0.6% increase in cash flow offset the relatively small difference in profitability of -0.4%, resulting in a 0.3% increase in value compared to Q1 2024.

For detailed analysis of sector trends by asset class, visit Altus Group’s research articles at:
https://www.altusgroup.com/insights/

About the Altus Group

Altus Group is a leading provider of asset and fund information for commercial real estate. We deliver information as a service to our global client base through a combined platform of industry-leading technology, advanced analytics and advisory services. Trusted by leading CRE leaders, our capabilities help commercial real estate investors, developers, owners, lenders and advisors manage risk and improve investment returns throughout the asset and fund lifecycle. Altus Group is a global company headquartered in Toronto with approximately 2,900 employees across North America, EMEA and Asia Pacific. For more information about Altus (TSX: AIF), visit www.altusgroup.com.

FOR MORE INFORMATION PLEASE CONTACT:

Elizabeth Lambe
Director of Global Communications, Altus Group
+1-416-641-9787
[email protected]