Performance of European real estate assets dropped further in 2023

The INREV European annual Asset Level Index recorded a total return of -4.03% in 2023. 

• The latest result is a record low since the inception of the Index and is significantly under its 3-year (2.04%) and 5-year (3.56%) annualised total returns. At -7.81%, capital growth drove down the performance, while income return increased from 3.44% in 2022 to 4.08% in 2023. 
• Retail displayed the strongest performance in 2023 at 1.16%, remaining in positive territory for the third quarter in a row. Industrial/logistics followed at -0.59%, recovering from last year’s weakest returns. Both the residential and office sectors saw their performance severely decline in 2023, and hit their lowest returns since inception, at -5.39% and -10.75%, respectively.  
• The UK outperformed other major markets in 2023, emerging from their strong negative returns of 2022 (+904 bps year-on-year). Dutch assets followed second, albeit remaining far in the negative at -4.94%. Correction for German and French assets continued in 2023, hitting record-low annual returns at -7.31% and -10.98%, respectively, largely affected by their large share of office assets. 

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