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European Fair Value Index Fair Value Index

European Fair Value Index

Sukhdeep Dhillon • 5/29/2024
Cushman and Wakefield Fair Value IndexTM offers investors insight into the relative attractiveness of current pricing in 119 prime office, retail and logistic property markets across Europe.

Paradigm Shift: Commercial Real Estate have reached a Turning Point

The European Fair Value Index (FVI) score rose to 81 in Q1 2024, up from 20 in Q3 2023, signalling that commercial real estate valuations have reached that turning point, with more markets passing fair value. The higher FVI score suggests a growing number of investment opportunities are emerging.

Since our previous update real estate investor sentiment has been noticeably shifting. This is confirmed by our newly created TIME Score, which shows CRE is currently in a transition phase. 

This change in sentiment stems from the acknowledgment that interest rate hikes have ceased, diminishing uncertainties about the future outlook. This newfound clarity is facilitating the adjustment of asset pricing to accurately reflect present conditions and associated risks. However, this varies across markets, with some not undergoing enough repricing to attract increased buyer interest. 

The FVI covers 119 markets across Europe. Since the last update (Q3 2023), no markets experienced a downgrade. Instead, over two-thirds (66%) of the markets within our coverage are now deemed underpriced, with 29% of markets reaching fair value. 

The increase in the FVI was largely anticipated, considering the further pricing adjustments over the past six months in a stable interest rate and bond market environment. Consequently, the current buying conditions are much more favourable than they were six months ago.

This is now Prime time as the index indicates if you buy today and sell after a hold period of 5 years it will yield returns exceeding the risk-adjusted required rate of return for current commercial property investments.

A sector breakdown reveals that the logistics sector continues to present more opportunities, with over four-fifths (82%) of logistics markets now considered underpriced, followed by the offices sector (63%) and retail (54%).

From a geographical point of view, the market classifications points to the more liquid markets, UK, Germany and France witnessing a greater share of ‘underpriced’ and ‘fairly priced’ markets. This is not surprising given the rapid outward adjustment in yields that have occurred in these markets.

Notable improvements across most markets have been facilitated by a combination of increased total returns fall in 5-year bond yields, and lowered credit spreads, thereby lower risk premium.

Rental growth has surprised on the upside: despite the decline in property values, robust market fundamentals have maintained upward pressure on prime rents across the three primary sectors.

The fluctuations in 5-year bond yields are influenced by various key factors, notably the recent decrease in inflation expectations has led to a corresponding decline in bond yields. 

About the European Fair Value Index 

Cushman and Wakefield Fair Value IndexTM offers investors insight into the relative attractiveness of current pricing in 119 prime office, retail and logistic property markets across Europe.

The Index score ranges from 0 to 100; a score 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 119 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

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Guilherme Neves
Guilherme Neves

Senior Research Analyst
London, United Kingdom

+44 (20) 32963892

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