Taking stock of euro-zone office yields after their recent stabilisation reveals a convergence across the region, with spreads between the northern markets and the historically higher-risk southern markets much tighter than normal. While this gap should hold in the coming quarters, such a lack of variance in pricing has proven temporary in the past and we expect that to be the case again this time. Given current yield levels and the outlook for rents, we think there is greater scope for yield falls in the northern markets in the coming years as the recovery gets underway, with several of the German, French and Dutch markets forecast to see the most compression – albeit still considerably less than in previous recoveries.
After two disappointing years, recent data suggest Europe’s commercial real estate market is stabilising. But will recovery follow and how strong will it be? Join our 20-minute online session on Wednesday 25th September at 10:00 BST as we discuss the outlook across the region. (Register here.)
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