Yields are stabilizing across the major U.K. real estate sectors for the first time since the market downturn began just over two years ago.
CoStar says transaction-based yields have remained stable or have fallen in all three traditional commercial property sectors — office, industrial and logistics — in the third quarter of 2024, adding fuel to a growing sense that a corner has been turned and “brighter days lie ahead.”
Average office yields stabilized at 8.7 percent, ending their steep 250-basis-point climb from 6.2 percent in the summer of 2022. While they remain at their highest level this century, CoStar says the recent pause suggests that the pain felt by many office owners may finally be ending, despite national office vacancies continuing to rise. London led the end of the rise in yields in the sector. Office yields in the capital held steady at 6.8 percent but continued to rise elsewhere. CoStar says the office-yield spread between London and the rest
