Commercial Property Price Index
Pan-European Commercial Property Price Index
Wide Bid-Ask Spread Points to Lower Values
The Green Street Commercial Property Price Index has decreased 7.5% from its recent pre-Covid peak. The decline in the index, which measures pricing of a broad swath of Pan-European commercial properties, was due to retail and office values. Industrial values are up slightly over the last quarter, but still 1% lower from the recent peak.
“The commercial real estate transaction market has largely come to a standstill as buyers and sellers adjust their underwriting expectations and try to agree on a fair price,” said Peter Papadakos, Managing Director at Green Street Advisors. “During periods of wide bid-ask spreads, asset values often move closer to the bid than the ask. There is little to no investor demand in the retail sector and waning investor demand for sub-prime office buildings today. However, high-quality office and most industrial assets are still likely to trade at punchy capital values per square meter.”
Green Street Commercial Property Price Index
Indexed to 100 in August 2007Download CPPI Report Download CPPI Data
Core Sector Average is equally-weighted between the Industrial, Office, and Retail sectors.
Change in Commercial Property Values
Amount property values have increased over this period
(as of 04/28/2020)
What makes our commercial property price index unique?
There are significant differences between the Green Street CPPI and other indices that track commercial property prices. Green Street's CPPI is appraisal-based. Appraisal-based indices are only as good as the valuation estimates used to construct them, and Green Street has long devoted sizable resources to deriving accurate estimates of the values of the properties owned by REITs. Most other indices are transaction-based.
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. Features that differentiate this index are its timeliness, its emphasis on average institutional quality properties, and its ability to capture changes in the aggregate value of the commercial property sector.