Q2 marked two full years of positive appreciation in property values, but momentum eases
Property value increases eased to 0.3% in Q2 2026 as office values leveled off
LONDON, Aug. 11, 2026 (GLOBE NEWSWIRE) -- Altus Group Limited ("Altus Group") (TSX: AIF), a leading provider of commercial real estate ("CRE") intelligence, today released its Q2 2026 Pan-European dataset analysis on European property market 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 2026 aggregate dataset included Pan-European open-ended diversified funds representing approximately €30 billion in assets under management. The funds cover 16 countries and primarily span the industrial, office, retail and residential property sectors.
The Pan-European Dataset recorded a 0.3% increase in commercial property values in Q2 2026, extending the market's positive appreciation track record to an eighth consecutive quarter. The level of appreciation has, however, moderated from the 0.6% gain reported in Q1. While values remain 1.9% higher than a year ago, overall gains have tempered and varying trends have emerged across and within the sectors.
Most of the value gains reported in Q2 continue to be supported by improving cashflow fundamentals, including rising market and contract rents, modest occupancy gains, and lower capital expenditure assumptions. Although the contribution from cashflows eased compared with the previous quarter, they remained the primary source of value growth and have offset the moderating impact of yield expansion over the past year. Valuation yields continued to move outward in Q2, tempering overall levels of appreciation.
"Q2 marked two full years of positive appreciation in property values across the Pan-European open-ended diversified funds, supported by healthy operating fundamentals," said Phil Tily, Senior Vice President, Valuation Advisory at Altus Group. "While the pace of appreciation moderated during the quarter, largely due to the office sector levelling off, the market continues to demonstrate resilience across the major sectors."
Key highlights by sector include:
- Residential: The residential sector remained the strongest performing asset class in Q2, with values rising 0.7% compared to Q1. Although cashflow growth moderated from the previous quarter, continued rental growth supported performance, helping the sector maintain its lead and achieve the highest annual appreciation among the major property types at 3.3% year-over-year.
- Industrial: The industrial sector rose just 0.1% sequentially over the quarter, as slower rental growth resulting in softer cashflow gains (from 1.1% in Q1 to 0.3% in Q2) were offset by modest yield expansion. The momentum in this sector has eased off over the last 12 months with values up 1.8% compared with an increase of 2.8% in the prior annual period.
- Office: Office values also leveled off over the quarter, as limited cash flow growth and lower capital expenditure assumptions were offset by further yield expansion. The sector remains the weakest performer among the major property sectors, with annual value growth of 0.8%, with overall gains being held back by Germany, the one region in the dataset where values have declined over the course of the last year.
- Retail: Retail values increased by an above average 0.5% in Q2 over Q1. Unlike other sectors, gains were driven primarily by yield-related factors rather than cash flow growth. This is the one sector that saw yield contraction over the last year, contributing to annual appreciation of 2.0%, keeping it ahead of both the industrial and office sectors in the performance rankings.
- Other: The "other" property sector continued to outperform the broader market, with values rising 2.0% in Q2 and 6.5% year-over-year. Strong rental growth and continued investor demand, particularly across student accommodation assets, has elevated the "other" sectors yield and cashflow-based performance well above the all-property average.
To download a review of the sector trends by asset class, click here.
About Altus Group
Altus Group is a leading provider of commercial real estate ("CRE") intelligence, anchored by ARGUS - the industry's go-to software for valuation and performance analytics. For more than two decades, Altus has played a vital role in empowering CRE professionals with the analytics and trusted advice they need to make high-stakes decisions with confidence. The world's CRE leaders rely on our market-leading solutions and expertise to drive performance and manage risk. Our people around the world are making a lasting impact on an industry undergoing unprecedented change - helping shape the cities where we live, work, and build thriving communities.
For more information about Altus (TSX: AIF) please visit www.altusgroup.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Jaime Bassett
Vice President, Marketing Communications, Altus Group
+1-416-641-9788
jaime.bassett@altusgroup.com
