Prime rental growth remained positive across all sectors at the European level in Q4 2024 with offices reporting the strongest growth. Yields edged in marginally across all asset types in Q4.
Office
Office prime rental growth was broadly flat at 5.4% (y/y) in Q4 24 versus 5.5% in Q4 23. The sector has seen annual growth of 5% or more in every quarter from Q4 22 inclusive. Benelux, the UK, Southern Europe and Germany have all benefitted from rental growth above 5% (y/y). Office yields moved inwards for a second quarter to 5.47%, although the European average remains 8bps above its level a year ago
Retail
High street rents showed further modest growth in the fourth quarter, leaving prime rents 3.5% above their level a year ago and supported by growth in some of Europe’s prestigious streets in London, Milan and Paris. Yields also edged in over the quarter and are 2bps below their level a year ago at 4.86%.
Logistics
Prime logistics rents at the European level grew 0.8% in Q4, up from 0.4% in Q3. This pushed annual growth to 3.4%, albeit more than half the level seen a year ago, with some of the strongest growth across Southern Europe and the UK. Yield compression accelerated with a growing number of markets reporting an inward shift. Yields ended 2024 2bps lower on 2023 at 5.27%.
