Across Europe, the commercial property sector has been regaining its footing. Recent data show that property values rose for the fourth quarter in a row, suggesting that some cyclical pressures may be easing, and investor sentiment is improving.
Growth has been modest but broad-based. The residential side of the market has led the recovery, supported by steadier cash flow despite rising yields. Industrial property has also gained, though its momentum is slower. More challenged segments, offices and retail, remain under stress, with weaker rental demand, rising costs, and in retail particularly, operating expenses biting into gains. Nevertheless, even these sectors have avoided significant decline, which is a positive sign.
Some alternative property types are standing out. Student accommodation showed a stronger quarterly increase, which may reflect investor interest in predictable income streams in uncertain environments.
Geographically, variation is material. Certain markets are outperforming; in one major country office values rose noticeably both quarter-on-quarter and year-on-year, while others saw declines or flat performance. The UK office sector, for example, has shown better resilience versus continental peers, though structural challenges around vacancy and changing demand persist.
Real Estate Credit Investments Limited (LON:RECI) is a closed-end investment company that specialises in European real estate credit markets. Their primary objective is to provide attractive and stable returns to their shareholders, mainly in the form of quarterly dividends, by exposing them to a diversified portfolio of real estate credit investments.
