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European Fair Value Index

Sukhdeep Dhillon • 1/5/2024
Cushman and Wakefield Fair Value IndexTM offers investors insight into the relative attractiveness of current pricing in 120 prime office, retail and logistic property markets across Europe.

Commercial Re-alignment Sets Sails for New Opportunities on the Horizon 

In Q3 2023, the European Fair Value Index score remained at 20, consistent with our earlier Q1 2023 update. This suggests that commercial real estate valuations are trailing market-clearing yields and have not yet achieved fair value.

Despite a substantial rise in the anticipated total return over the next 5 years (averaging 45 bps), the changing interest rate landscape has propelled government bond yields to much higher levels. The increase in borrowing costs have pushed yields in many markets beyond sustainable levels, triggering repricing. In a bearish market, the widening gap between valuations and market yields is causing investors to remain cautious as they seek to comprehend the current pricing landscape.  

However, in light of the recent reassessment of risk, certain market repricing is creating opportunities and are currently offering more appealing entry points for investors, with more fairly priced markets. As we near the conclusion of the pricing reset, new entry points will be set, aligning yields with the shift in risk premiums toward this new normalised rate environment.

European investment volumes have fallen to levels reminiscent of 2010 reaching €32.8bn in Q3 2023 (-57% YTD), with volumes declining for five consecutive quarters (since Q3 2022). Deal flow continues to be limited due to a significant disparity in price expectations, affecting all major property markets and sectors. While offices remained the largest sector in terms of deal volume, the actual number of office transactions hit a record low. The retail sector has held up better experiencing a year-to-date deal volume decline of 44% year-on-year, as opposed to a 58% drop in industrial and a 61% decrease in offices.   

A combination of slow and cautious growth, elevated debt costs and more stringent credit conditions will limit investment volumes in the latter part of 2023.

In accordance with expectations, recent data indicates a decrease in UK inflation from 6.7% to 4.6% year-on-year in October, the lowest level since October 2021, primarily driven by a decline in utility prices. UK Core inflation also experienced a drop from 6.1% to 5.7% year-on-year. Additionally, euro area inflation exhibited a significant decline, decreasing from 4.3% in September to 2.9%, with core inflation falling from 4.5% to 4.2%.

As inflation is aligning with the anticipated trajectory, this fosters confidence that current monetary policy is suitably restrictive. Consequently, we expect Central Banks to uphold their existing stance, at least until the second half of 2024.

The majority of the 120 markets covered in the analysis are classified as ‘fully priced’ (63%) followed by ‘fairly priced’ (34%) and ‘underpriced’ (3%). 

Sector-level data reveals that most opportunities can be found in logistics, given that all (4) markets that are currently under-priced are within the logistics sector.

Geographically, market classifications have changed substantially from the previous Fair Value Index update, particularly in the UK, which is no longer witnessing the greater share of ‘underpriced’ markets. In turn, the CEE and the BENELUX improved with more markets in the ‘underpriced’ and ‘fairly priced’ range.

About the European Fair Value Index 

Cushman and Wakefield Fair Value IndexTM offers investors insight into the relative attractiveness of current pricing in 120 prime office, retail and logistic property markets across Europe.

The Index score ranges from 0 to 100; a scores close to 100 indicates that most of the markets covered by the index offer attractive returns (Underpriced); and scores close to zero indicates that markets covered offer inadequate returns (fully priced).

Markets are categorised by comparing fair and forecast returns. Markets estimated to be more than 5% under-valued are classified as Underpriced. Markets estimated to be more than 5% over-valued are classified as Fully-priced. Markets trading in between this range are classified as Fairly priced.

Forecast returns are estimated using C&W Research’s extensive market forecasts, which encompass rent and yield forecasts for all 120 European markets.


As the market recalibrates, stay informed on pivotal movements—from valuation trends to investment hotspots. Anticipate changes in property values and prepare for the market rebound. Our reports provide a strategic vantage point, revealing how to harness yield expansion and navigate rate adjustments.


Sukhdeep-Dhillon-Head of EMEA Forecasting
Sukhdeep Dhillon

Head of EMEA Forecasting
London, United Kingdom

+44 (7920) 574823

VCard letöltése

Guilherme Neves
Guilherme Neves

Senior Research Analyst
London, United Kingdom

+44 (20) 32963892

VCard letöltése

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