Yield outlook remains stable as European office cross border activity gathers pace
According to Savills latest research, average prime European office yields remained broadly stable at 4.9% during Q2 2026. Dublin (-10 bps to 4.75%), Milan (-25 bps to 4.00%) and Brussels (-5 bps to 4.75%) compressed.
Oslo moved out by 25 bps to 4.75% following an interest rate increase from the Norges Bank, while Düsseldorf moved out by 10 bps to 4.60%.
The international real estate advisor says that the US-Iran conflict has slowed the speed of investment recovery in 2026 as deals take longer to complete. However, buyers are increasingly willing to acquire European offices again, particularly where assets offer secure income and low future capex costs. Vendors are generally under no pressure to sell and are therefore holding firm on pricing expectations. A shortage of investable prime stock has continued to support pricing for best-in-class assets.
James Burke, director, Global Cross Border Investment at Savills, says: “According to RCA data, cross border investment into European offices accounted for 36% of activity during H1 2026, the highest proportion since 2022. We are continuing to see intra-European buyers being particularly active, including Spanish private offices, French SCPIs, German institutional funds and insurance capital as well as Czech domiciled groups. Swedish outbound investment has gathered pace while we have also observed a small but noteworthy increase in activity from owner-occupiers.”
Savills analysis indicates that since 2019, average European CBD office vacancy rates have risen by 220 bps to 4.9%, whereas average total market vacancy rates in the sector have risen by 500 bps to 9.5% over the same period, reflecting rising occupier preference for prime locations.
Mike Barnes, European office research director at Savills, says: “Europe’s occupational story provides a compelling case for investors. Take-up has been broadly resilient, but the composition of demand is changing. Occupiers are taking longer to commit to new space, and the proportion of lease renewals remains elevated, reflecting both economic caution and the high cost of fit-out. At the same time, the limited availability of prime space in central locations is supporting rental growth, particularly for highly amenitised, energy-efficient buildings.”