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<ul> <li><span style="font-size: 18px;"><em>Number of markets reporting yield compression doubles in Q4, driven by logistics</em></span></li> <li><span style="font-size: 18px;"><em><em>Offices post the strongest rental growth on a quarterly and annual basis</em></em></span></li> </ul> <p><span style="font-size: 16px;">New data from Cushman &amp; Wakefield reveals that a growing number of European commercial real estate markets saw prime yields move inwards in Q4 2024, with 24 market sectors reporting an inward shift in Q4 2024, double the number in Q3, providing a clearer signal that Europe&rsquo;s investment markets are on the road to recovery at the prime end of the market.&nbsp;&nbsp;<br /> <br /> Cushman &amp; Wakefield&rsquo;s latest <em><a href="https://upgrade-uat-www.cushmanwakefield.com/en/united-kingdom/insights/dna-of-real-estate">DNA of Real Estate,</a></em> which focuses on Europe&rsquo;s prime markets, highlights that logistics led the field, with 11 markets reporting an inward shift in prime yields quarter on quarter (q-o-q), followed by offices (eight markets) and high street retail (five).&nbsp;<br /> <br /> Southern and Central European markets saw the most significant inward movements. Office yields in Southern European markets moved in 10bps, largely driven by strong performance in Spain. Logistics and high street retail in Southern Europe also saw inward shifts of -8bps and -5bps, respectively, due to robust economic fundamentals supporting greater optimism and improved pricing levels in Spain and Portugal.<br /> <br /> Central European markets experienced modest but cross-sector compression in office (-5bps), high street retail (-5bps), and logistics (-4bps) sectors. In the Nordics, Sweden and Norway saw compression in the office sector (-6bps).<br /> <br /> At the All-Europe level, offices and logistics reported inward shifts q-o-q of 3bps to 5.47% and 5.27%, respectively, in Q4 2024. High street retail yields moved in a more modest 1bp to 4.86%. Year on year (y-o-y), only logistics and high street retail saw yields drop, by 2bps, while offices saw an overall outward shift of 8bps.<br /> <br /> <strong><a href="https://upgrade-uat-www.cushmanwakefield.com/en/united-kingdom/people/nigel-almond">Nigel Almond</a>, Head of Data Analytics, EMEA Research, at Cushman &amp; Wakefield</strong>, said: <span class="blockquote">"The significant inward shift in prime yields across a growing number of European commercial real estate markets in Q4 2024 underscores the robust demand and investor confidence in the sector. Logistics continues to lead the way, reflecting the sector's critical role in the modern economy, while the strong rental growth in offices highlights the ongoing demand for high-quality, well-located assets. This trend is particularly evident in Southern and Central Europe, where economic fundamentals are driving optimism and improved pricing levels. We anticipate these positive dynamics to persist in 2025, further bolstering the resilience and attractiveness of the European commercial real estate market."</span></span></p> <div><span style="font-size: 16px;">Across all sectors at least 90% of all markets reported flat or positive rental growth on a quarterly and annual basis in Q4. Although more office markets reported some falling rents, overall rental growth across Europe has remained robust. Offices posted the strongest rental growth on a quarterly and annual basis in Q4, with office rents growing by 5.4% per annum, marking the ninth consecutive quarter of annual growth above 5%. It was also stronger than the 5.2% reported in Q3. The UK (+7.9%), Benelux (+8.2%), Southern Europe (+5.5%) and Germany (+5.3%) saw the strongest growth y-o-y, as strong demand for well located, best-in-class assets continues to support rent appreciation.&nbsp;&nbsp;<br /> <br /> Prime rental growth on the high street reached 3.5% per annum in Q4, more than double the 1.5% registered a year ago, supported by strong performance in prestigious shopping streets like Milan&rsquo;s Via Montenapoleone, London&rsquo;s Bond Street, and Avenue des Champs-&Eacute;lys&eacute;es in Paris &ndash; as highlighted in Cushman &amp; Wakefield&rsquo;s latest <em><a href="https://upgrade-uat-www.cushmanwakefield.com/fr-ca/insights/main-streets-across-the-world">Main Streets Across the World</a></em> report.<br /> <br /> Strong rental growth and some mild yield compression towards the end of the year ensured prime office values ended the year 4.4% above their 2023 levels, supported by a near 8% rise in Southern Europe. Despite the outward year-on-year shift, strong rental growth ensured office values grew the most in 2024 ahead of high street retail (3.9%) and logistics (3.8%), which benefitted some yield compression, but lower levels of rental appreciation.&nbsp;</span></div> <p>&nbsp;</p>

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New data from Cushman &amp; Wakefield reveals that a growing number of European commercial real estate markets saw prime yields move inwards in Q4 2024, with 24 market sectors reporting an inward shift in Q4 2024, double the number in Q3, providing a clearer signal that Europe&rsquo;s investment markets are on the road to recovery at the prime end of the market.&nbsp;&nbsp;

European Commercial Real Estate Markets Experience Significant Yield Compression In Q4

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European Commercial Real Estate Markets Experience Significant Yield Compression In Q4

Number of markets reporting yield compression doubles in Q4, driven by logistics.

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European Commercial Real Estate Markets Experience Significant Yield Compression In Q4

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European Commercial Real Estate Markets Experience Significant Yield Compression In Q4

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