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European Fair Value Index 2023

Sukhdeep Dhillon • 15/06/2023
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 European Fair Value Index score increased in Q1 2023 to 20, up from 0 in Q3 2022, indicating that commercial real estate valuations are beginning to turn, heading toward fair value. 

Since our previous update real estate investor sentiment remains tested, with the continuation of interest rate rises which has not only heightened uncertainty regarding the outlook but has also provided challenges in pricing assets to reflect current conditions. The general consensus is that the investment market will pick up in H2 2023 once pricing reaches equilibrium, narrowing the expectations between buyers and sellers. However, this is largely dependent on where interest rates will settle in the medium term – which will influence the return of activity in this next cycle. 

Total Investment volumes fell by 62% Y/Y in Q1 2023. Volumes were down in almost all the major property sectors with the exception of hotels where deal volume was flat. Noticeably, the industrial sector witnessed the largest Y/Y decline in volumes which were down by 76%. This was led by the fall in deals in the UK where deals have fallen from €8.6bn in Q1 2022 to just €1.4bn in Q1 2023.  

As a result, the majority of the 120 markets covered in the analysis are classified as ‘fully priced’ (67%) followed by ‘fairly priced’ (27%) and ‘underpriced’ (7%).  

Geographically, markets classifications remained in line with the previous quarter, with the exception of the UK, which is now witnessing a greater share of ‘underpriced’ and ‘fairly priced’ markets. This is not surprising given the rapid outward adjustment in yields that occurred in the UK, in particular, the logistics market. 

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.


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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