European property markets recorded steady gains in Q4 2025, with valuations up 0.4% overall, according to Altus Group data seen exclusively by Property Week.
Over the full year, values rose by 1.9%, recovering only a small portion of the setback the market experienced during the two-year downturn, during which 16.8% were written off the value of assets in Altus Group’s pan-European valuation dataset.
Phil Tily, Altus Group’s senior vice-president, head of performance analytics, said: “Despite central banks’ policy of gradually moving to lower interest rates, valuation yields did edge outwards across all sectors in Q4, putting slight downward pressure on values, a possible signal of investor caution, given the added complexity of the wider geopolitical backdrop.”
Meanwhile, a further strengthening of cashflows ensured that appreciation remained positive across each of the main property types.
Industrial and residential both recorded the largest cashflow gains of the sectors and had identical value growth of 0.6% in Q4. Over the full year, residential outperformed, delivering a 3.7% value increase versus 2.6% for industrial.
Altus said residential was the clear front runner from a cashflow standpoint as market rents rose 4.4%. Appreciation results for the sector eased off after a strong first half of the year, but remained above average in all four quarters.
The industrial sector produced relatively consistent results throughout the year, with quarterly value gains ranging from 0.5% to 0.7%, which equated to an above average 12-month increase of 2.6%.
Investor sentiment towards industrial remains strong as valuation yields moved in more than those of any other main property type over the course of the year, Altus Group reported.
The retail sector came in just below average for the year, with values up 1.6%. Having picked up in Q3, values slowed again in the closing three months of the year, rising by just 0.2%.
The sector has made slow progress from a cashflow standpoint, with market contract rents improving by just 0.6%, and 0.8% over the year, Altus found.
Offices had the most subdued track record in 2025, registering an increase of just 0.1%, with appreciation levels for the sector tempered by an increase in capital needing to be invested into specific assets.
Values in the sector faltered earlier in the year, down 1.4% in Q2, and then closed 2025 with a relatively muted 0.2% uplift.
During 2025, the office sector produced variable results across different countries. France and the UK produced the strongest results with values up 4.9% and 3.7% respectively.
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