Research - SEPTEMBER 15, 2022

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London and key German cities remain most attractively priced office markets in Europe

by Andrea Zander

London – City, Hamburg, London – West End, Frankfurt and Berlin’s office markets remain the most attractively priced in Europe, buoyed by a more positive rental outlook over the next five years and recent yield softening in the top seven German office markets, according to Savills.

Since the previous quarter, the average European office yield spread between calculated market yields and current market yields has reduced from 101 basis points to 73 basis points, reflecting both an inward movement of risk-free rates, and an outward movement of prime office yields in some European markets, according to the international real estate adviser.

“The German cities of Hamburg, Frankfurt, Berlin and Munich (+30 basis points), Paris CBD (+15 basis points) and Madrid (+15 basis points) have moved first, perhaps due to higher liquidity within these markets, and we anticipate a similar trend across less liquid markets in the next quarter,” said Mike Barnes, associate direct

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