European leasing and investment markets held firm in the face of the geopolitical headwinds in Q2. Rental growth was positive for all sectors at the All Europe level, with yields in a majority of markets remaining stable, although they have started to soften in some geographies and sectors.
Office
Offices led rental performance with prime CBD office rents across Europe rising 1.2% (Q/Q) and 4.5% (Y/Y), in line with growth in recent quarters. More markets reported yields moving out, with just a couple moving in. As a result, the All-Europe prime office yield edged out 3bps in Q2 to 5.39%.
Retail
Prime high street retail assets were broadly flat, with rents up 0.2% on the quarter and 3% over the year. Growth was more subdued in Q2 with most markets flat. The All-Europe prime high street yield held at 4.77%, unchanged on the quarter and four basis points tighter Y/Y.
Logistics
Logistics rents rose 0.6% on the quarter, in line with growth in the previous four quarters, leaving annual growth at 2.4%, down from 3.1% last quarter. Prime logistics yields moved out two basis points to 5.23%, as nine markets reported an outward shift, though a couple of markets continued to see compression.
