The latest Cushman & Wakefield DNA of Real Estate report shows European prime property markets holding a steady course in the second quarter of 2026. Rental growth remained solid across the major sectors (offices, logistics and retail) even as prime yields showed the first signs of softening in two years.
The second quarter was characterised by geopolitical headwinds as tensions in the Middle East remained for much of the period. Bond yields were elevated over the quarter, easing marginally towards the end of the period on hopes of a peace deal. With the ECB raising rates the prospect of yield compression subsided placing values under pressure.
Nigel Almond, Senior Director, Global Property Research & Intelligence, EMEA at Cushman & Wakefield said: “Despite the headwinds in the market, over three quarters of markets reported no yield movement, albeit a growing number reported an outward shift, with the All-European office and logistics yields moving out. Positively, leasing markets showed a more solid performance as rents continued to rise on a quarterly and annual basis, especially across the office sector. This continues to support modest capital value growth at the All-Europe level and in most regions.”
Offices
Offices led rental performance with prime CBD office rents across Europe rising 1.2% quarter-on-quarter (Q/Q) and 4.5% year-on-year (YOY), in line with growth in recent quarters. Benelux (+2.6%), Germany (+1.9%) and the UK & Ireland (+1.6%) posted the strongest quarterly gains. Rotterdam was the standout market, up 13.2% on the quarter as prime rents nudged €385/sqm/pa supported by recent transactions and asking rents on new schemes. Elsewhere, key UK regional cities Edinburgh and Manchester saw rents rise 7.6% and 6.7% respectively as strong demand and a shortage of quality space led to new rent levels being set on new developments. Seven markets reported yields moving out, the highest since Q2 2024, with just two showing an inward shift. 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 prime high street rents up 0.2% on the quarter and 3% over the year. Growth was more subdued in Q2 with most markets flat. Stockholm (+2.3%) and Madrid (+2.0%) the strongest performers over the quarter. Positively, no market recorded a decline. The All-Europe prime high street yield held at 4.77%, unchanged on the quarter and four basis points tighter YOY. Rome and Milan compressed 25bps Q/Q to 3.5%, although Lyon and Oslo both registered 25bp outward movements.
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. Southern Europe with +2.4% and Central & Eastern Europe (CEE) at +1.5% led the way, with Warsaw up 4.8% Q/Q and both Milan and Rome posting growth of 2.9% Q/Q. Prime logistics yields moved out two basis points to 5.23%, as nine markets reported an outward shift, typically 5-10bps, though a couple of markets (Prague and Copenhagen) continued to see compression.
Regional picture
Overall, Southern European and CEE markets remained the most resilient regions, combining relatively strong rental growth with yields that were stable or compressing marginally. Both regions have seen yields remain stable or move inwards on a quarterly and annual basis, alongside stable or positive rental growth on a quarterly and annual basis.
