Latest INREV Market Insights confirms the anticipated European non-listed real estate recovery

The latest INREV Market Insights shows growing confidence in European real estate as the Consensus Indicator nudged up and the Q2 2024 capital growth turned positive for both the INREV Fund Index (0.17%) and the Asset Level index (0.10%). Total returns improved further to 0.97% and 1.17%, respectively. Moreover, transaction volumes picked up for both Continental Europe and the UK, while investment sentiment remains net positive for most markets and sectors.

Key highlights:

• The Consensus Indicator reported a headline reading of 55.8, marking the third consecutive quarterly increase, as well as an all-time high reading since its inception in March 2023. Leasing and operations is the only subindicator to deteriorate in September, confirming a bifurcation of the letting market as a growing risk.
• A majority of INREV Consensus Indicator Survey participants expect Q3 2024 pan-European performance to be driven primarily by rental income. While 31% foresee yield compression in the UK, expectations remain mixed across regions. Markets like the Nordics, Netherlands, and Spain are nearing the end of repricing. 
• Most regions report positive investment sentiment, with Spain surpassing the UK as the top investment destination (its highest level since the survey's inception in December 2020). In Northern Europe, the Netherlands, Germany and the Nordics report only a moderate positive sentiment, which is an improvement for Germany. France is lagging after a slight deterioration since June. 
• Residential remains the most preferred sector, drawing the highest level of interest among respondents. However, office sector sentiment remains deeply negative, extending its decline from prior quarters.
• In Q2 2024, the best-performing sectors, residential and industrial/logistics, showed the lowest dispersion between their best and worst-performing assets. Both sectors also led country performance for the Netherlands and the UK, at 2.56% and 1.59%, respectively. Sector performances improved for all French sectors, except retail. Germany, meanwhile, continued its streak of negative performance for the eighth consecutive quarter, posting a total return of -0.61% for Q2.

Download the Market Insights September 2024 report, infographic and the Consensus Indicator below, or hear all about it in our upcoming Research and Market Information briefing on 26 September at 10:00 CET.