Altus Group's pan-European property dataset reveals narrow positive valuation gains in the second quarter of 2026, with overall values up 0.3%, a slight pull-back from the 0.6% increase recorded in Q1 2026.

This marks the eighth consecutive quarter of positive appreciation since the period of contraction from Q3 2022 to Q2 2024. Cashflow fundamentals remained the primary driver of growth, although the magnitude of the impact declined from 0.9% in Q1 to 0.3% in Q2.

Average contract and market rents continue to rise, alongside a slight improvement in overall occupancy levels. Meanwhile, a reduction in capital expenditure being modelled in valuations also played a positive role, adding 0.1% to overall appreciation levels, Altus found.

In contrast, valuation yields continued to edge outwards, putting a slight -0.1% downward pressure on appreciation levels. Over the past year, values in the dataset have risen by 1.9%, driven entirely by cashflow improvements across all sectors.

These cashflow improvements have more than counterbalanced any negative impact from slight increases in valuation levels, which have become a factor during the last three quarters, according to Altus.

However, despite the recent positive trend, values are still net -1.0% a year over three years and -1.3% a year over five years – the outward movement in yields offsetting the ongoing improvements in cashflow fundamentals.

Most of the gains in Q2 were confined to the residential (0.7%) and retail (0.5%) sectors, with values for industrial up just 0.1% and office values technically at a standstill over the quarter. With the exception of retail, the majority of any positive impact on values resulted from cashflow gains, tempered by increases in valuation yields.

Outside the four main sectors, results remained comparatively strong, with hotel values up 1% and student accommodation the outright frontrunner with gains of 3.2%.

Phil Tily, senior vice-president, head of performance analytics, at Altus, said: “Much the same hierarchy plays out on a one-year basis, where residential values are ahead, up 3.3%, followed by retail values, up 2.0%. Industrial sector appreciation levels have tapered off at 1.8%, and offices are further adrift, with gains of just 0.8%.”

In the industrial sector, the markets that performed above the average and with positive appreciation were all supported by above-average cashflow gains. Spain and Sweden led the group for a third consecutive quarter, with 0.8% appreciation, both with near-1% increases in actual market rent levels over the three months.

Two of the larger markets, the UK and France, both posted a decline in values over the quarter, with the two regions pegged back by outsized yield increases and a factoring down of any cashflow gains.