Improving investor sentiment is narrowing the office yield gap between London and major regional markets, according to CoStar.
Based on a three-quarter trailing average, London’s transaction-based office yield rose 50 basis points to 6.5 percent in first quarter 2026, up from 6 percent in fourth quarter 2025 and a recent low of 5.8 percent in third quarter 2025.
“Average office yields outside London fell slightly after reaching a 12-year high at the end of 2025, with regional yields declining by 30 basis points in the first quarter of 2026, though remaining elevated at 10.3 percent,” said Mark Stansfield, senior director of market analytics at CoStar Europe. “The yield spread between London and the regions narrowed to 370 basis points from 480 basis points two quarters ago but remains historically wide.”
Average central London office yields rose by 30 basis points to 5.7 percent, while Big Six office yields compressed by 30 basis points to 8.8 percent.
