After almost two years of the COVID-19 pandemic, Europe’s office sector is dis-playing an increased resistance to the city.

Research from Catella Group shows a trans-action volume of some €87.5 billion in 2021 — up by 4.1 percent on the previous year. The total deal volume, however, still lags by –15.3 percent compared to the 10-year pre-crisis average.

The manager expects yields to remain stable in 24 of the 39 markets it surveys, whereas a slight yield compression is to be expected in the remaining 15 office locations. The dynamics behind yield compression have visibly weakened in recent years; nevertheless, a decline in net prime yields in the office sector of around 20 basis points to a value of 4.01 percent was observed in 2021. Catella says that high demand for office properties in Europe is causing net prime yields to “move sideways”. The lowest yields and at the same time the most expensive investments in Europe continue to be found in Germany’s t