At the All-Europe level rental growth was positive Q/Q across the core asset classes for the twelfth consecutive quarter, with the pace of growth rising compared to Q3. Yields also continued to edge inwards for a fifth consecutive quarter across each sector at the All-Europe level.
Office
The office sector continued to outperform other sectors with rents at the All-Europe level up 1.4% (Q/Q) and 4.6% (Y/Y). This is only marginally below the 4.9% (Y/Y) growth reported this time last year. With over 80% of markets recording positive annual growth, this underscores the breadth to the strength in leasing for best in class assets. Yields were nearly 10bps lower at 5.37%, well below the low of 3.87% in Q1.
Retail
Rental growth on the high street rose by 1.1% (Q/Q) at the All-Europe level taking growth to 4.4% (Y/Y), just below growth in the office sector, and above the 3.6% reported a year ago with a growing number of markets reporting growth. Prime yields closed the year at 4.76%, nearly 111bps lower on a year ago as yield compression remained relatively robust compared the other sectors.
Logistics
Rental growth remained positive in the logistics sectors with more than two thirds of markets reporting growth over the year, and rents now 3.6% higher (Y/Y) at the All-Europe level, above the 3.4% registered a year ago. Growth also rose (Q/Q) to 0.7%. Yields also edged in for a sixth consecutive quarter ending the year at 5.2% at the All-Europe level.
