AEW has forecast prime European offices will deliver average total returns of 10 percent annually during the next five years, supported by rental growth, resilient income returns and the sector’s repricing between 2022 and 2024.
In its recent report, Positive outlook for prime offices despite elevated lease incentives, AEW expects prime headline rental growth to average 3.9 percent annually from 2026 through 2030 across 63 European office submarkets. Even under the firm’s downside scenario, rental growth is projected to average 3.7 percent annually.
European office vacancy rates are expected to peak at 9 percent in mid-2026 before declining to 7 percent by 2030 as new supply remains limited and more office properties are converted to other uses. AEW said the market continues to bifurcate between the highest-quality offices and properties facing structural vacancy and elevated leasing incenti
