Commercial Finance Specialists

Office property investment yields in prime UK locations fell in the fourth quarter of 2009, highlighting a Europe-wide trend, new figures show.

The CB Richard Ellis (CBRE) office yield index for the EU-15 area fell by 22 basis points in the three months to the end of December, with Glasgow commercial development yields falling by 115 basis points and Birmingham and Manchester by 110 points.

Retail yields also followed the office yield decline, with Europe-wide falls of seven basis points on the retail yield index, with eight specific UK locations out of a total of 39 across the continent moving lower.

Responding to the changes, director of EMEA Research Richard Holberton said: "The UK continues to stand out in a European context as the focus of the largest yield movements, but prime office yields are now also under downward pressure in many of the major urban centres including Paris, Frankfurt, Milan and Madrid.

"Given current investor preferences, it is no coincidence that yields are being driven lower."

The release of this data comes after the publication of the Confederation of British Industry (CBI)/PricewaterhouseCoopers Financial Services Survey, which indicated that mortgage lending will improve only slightly in the next quarter.