European commercial real estate’s negative total returns moderate in Q1 on UK

Commercial real estate investments generated negative total returns (a combination of appraisal values plus net rental incomes) of 1.1 percent in the first quarter compared with the preceding three months. That created a negative total return of 7.4 percent compared with a year earlier, according to the MSCI Europe Quarterly Property Index.

But there was an improvement compared with Q4 2022, which was the worst quarter in the index’s history. This improvement was partly due to a moderation of capital-value losses in the industrial sector, after a drop of more than 10 percent in the fourth quarter.

The United Kingdom’s all-property total returns just about crept into positive territory — the only country-level market in which returns were positive.

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