Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Cushman & Wakefield Research Shows EMEA Prime Logistics Yields Close To Converging On Retail

Richard Coleman • 08/11/2021

The rampant growth in rents across the logistics sector continues amid a broader recovery in markets as the impacts of the COVID-19 pandemic begin to wane, according to Cushman & Wakefield’s latest DNA of Real Estate research for Q3 2021. 

Prime European logistics rents grew on average by 5.2% over the past 12 months, the fastest year-on-year rate in over two decades. The increase reflects the continued demand for best in class space in the top locations as demand outstrips a reducing supply of prime buildings in many markets. Of the major European markets tracked by Cushman & Wakefield, the UK saw the strongest year-on-year increase at 7.3%, followed by the Central & Eastern Europe (CEE) region at 4.4%. At a city level, Prague (+25.6%), London (+14.5%) and Bristol (+13.3%) saw the biggest increases.   

Yields fell 16bps over the quarter to 4.56%. Yields are now 68 bps lower compared with the same period a year ago, the strongest fall in recent years, though still short of the record 112 bps reduction in 2006. The gap between logistics yields and other use types narrowed to their lowest level on record – just 21bps above high street retail yields and 39bps for offices. Until Q3 2020, the gap had always been above 100bps.  
Nigel Almond, Head of Data & Analytics, EMEA at Cushman & Wakefield, said: “The narrowing of yields between logistics and other asset classes, in particular retail, underscores the clear divide in fortunes between these sectors over the last few years which has accelerated further due to the pandemic. Even allowing for that, logistics remains an attractive proposition for investors, with the prospect for rental growth across most logistics markets, a low interest rate environment, and yields expected to compress further into 2022.” 

With workers increasingly returning to the office following restrictions over the last 18 months, the office sector is witnessing green shoots of recovery. Modern offices offering better ventilation and flexibility to adapt use to help retain and attract staff are starting to see a return to headline rental growth. On average, prime office rents rose by a further 0.5% over the quarter, following an increase of 0.3% in Q2 and 0.1% in Q1. This pushed annual growth back into positive territory for the first time since the pandemic started to bite in Q2 2020, with rents now 0.3% higher year-on-year. Positively, no markets registered a fall in rents over the quarter. 

Growth is supported by increases in the Nordics (+2.5% y-o-y) and Germany (+2.3% y-o-y). Although some markets continue to see falls on an annual basis, with more markets now posting rental growth Cushman & Wakefield expects that pattern to shift as evidenced by quarterly increases in London’s City (+5.4%) and West End (+2.4%) markets over the third quarter. 
Office yields continue to compress, albeit at a modest pace, with the European prime yield averaging a 3bp reduction over the quarter to a new record low of 4.16%. Excluding the UK, prime office yields now average 3.94%, having fallen below the 4% mark for the first time on record in Q2 2021. With an increasing number of markets forecast to grow as demand for best-in-class office space improves, yields are expected to shrink further over the next 12 months. 

In contrast, prime retail rents continue to fall, down 1.1% over the quarter and by 6.1% year-on-year. Twelve out of 42 markets reported falling rents in the third quarter, with Barcelona, Bristol, Leeds, Madrid and The Hague all posting quarter-on-quarter falls of 5% or more on a quarterly basis. Although the outlook remains uncertain, there are some signs of optimism. Compared with previous quarters, the number of prime markets expecting a fall in rents over the next twelve months has reduced, with a handful of markets now expecting a modest increase.  

At the same time prime European high street yields stabilised over the quarter, averaging 4.35%. Modest compression in Germany and the CEE was offset by flat or a marginal rise in yields elsewhere in Europe, notably in Belgium, Ireland and the Netherlands.  

Nigel Almond added: “In some markets we are starting to see a modest reversal of recent outward yield movements as investors’ sentiment has improved relative to a more negative outlook in the wake of the pandemic. But with yields edging out across some markets it is clear the future path for retail remains uncertain with caution remaining the watchword.”  


Richard Coleman, Head of Communications EMEA
Richard Coleman

Head of EMEA Communications • London

What's new

What's Next for Offices Post-Event
What's Next for Offices Post-Event

Our virtual event, What’s Next for Offices, invited Derwent London, Pearson plc, HB Reavis along with other workplace specialists, to explore changes in the office sector, make predictions for the market and discuss the role of offices in building a sustainable future.

Ben Cullen • 09/11/2021

Trevor Stone
Cushman & Wakefield Appoints Head of Public Sector Project & Development Services

Cushman & Wakefield has appointed former AECOM Director Trevor Stone to lead its UK Project & Development Services (PDS) team’s activity with public sector clients.


Total Workplace
Cushman & Wakefield Expands Total Workplace Team With Four Senior Hires

Cushman & Wakefield has expanded its Total Workplace team, which advises real estate occupiers, developers and owners on how best to achieve strategic goals through the workplace, with four hires in EMEA.



dna graphic
Research • Investment

DNA of Real Estate

DNA of Real Estate tracks prime rents and yields in 46 cities across Europe, covering the key office, logistics and high street destinations. It has an overview of quarterly performance, and a summary of prime rents and yields for the cities and markets.
Nigel Almond • 09/11/2021
supply chain (image)
Research • Logistics

Warehousing to Address Supply Chain Disruptions

The importance of supply chain resilience has never been more apparent. As businesses look to reduce the vulnerability caused by disruption, we have seen a fundamental change in how and when they distribute goods.
David Hutchings • 13/09/2021
Westminster Bridge towards Houses of Parliament, London
Insights • Economy

Brexit Trade Negotiations and What They Mean for Businesses

Like COVID-19, Brexit has major implications for businesses across the country whatever the outcome of the negotiations. 
Richard Coleman • 04/11/2020
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies.
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All