Core Insights - European commercial property values have increased for the fourth consecutive quarter, with a rise of 0.6% from Q1 2025 and 2.8% year-over-year from Q2 2024, indicating a stabilizing market despite mixed macroeconomic conditions [3][4]. Market Overview - Altus Group's Q2 2025 dataset includes €29 billion in assets under management across 17 countries, covering industrial, office, retail, and residential sectors [2]. - The growth in commercial property values has moderated, with cashflow gains tapering to 0.5%, the lowest level in four quarters, yet the yield impact remains positive due to improving investor sentiment in a lower interest rate environment [3]. Sector Performance - **Residential Sector**: The top performer with a 0.9% value increase over Q1 2025, benefiting from stronger cash flow fundamentals despite rising yields [6]. - **Industrial Sector**: Values increased by 0.8% over Q1 2025, although cashflow appreciation slowed [6]. - **Office Sector**: Experienced a muted 0.3% value increase over Q1 2025, with cashflows largely unchanged despite tightening yields [6]. - **Retail Sector**: Values rose by only 0.3% over Q1 2025, impacted by minimal rent improvements and increased operating expenses [6]. - **Other Sectors**: Student accommodation assets saw a value increase of 1.9% over Q1 2025 [6].

Core Insights - European commercial property values have increased for the third consecutive quarter, with a 0.8% rise from Q4 2024 and a 2% increase year-over-year [3]. Summary by Sector - **Residential Sector**: The residential sector led with a 1.5% value increase over Q4 2024, driven by strong cash flow fundamentals and above-average rent growth. The Netherlands showed the strongest market performance [7]. - **Industrial Sector**: The industrial sector experienced a modest growth of 0.8% over Q4 2024, with steady yields and improved cash flows. Italy and Spain recorded the largest gains in this sector [7]. - **Office Sector**: Office values rose by 0.8% in Q1 2025 compared to Q4 2024, supported by yield improvement and strengthening cash flows. France had the largest valuation gains, while Germany and the U.K. saw declines [7]. - **Retail Sector**: Retail values increased by 0.5% over Q4 2024, with rising yields affecting shopping centers negatively, but benefiting high street shops and supermarkets. Retail warehouses were the top performers in this sector over the past year [7]. - **Other Sectors**: Student accommodation assets outperformed hotels, with a 3.0% value increase over Q4 2024 [7].