Do smaller, second cities now offer better value?

With some of the tightest office markets, core European cities are set to see the best rates of rental growth over the 2018-21 period. However, with lower current yields and a weaker outlook for capital values, total returns will be relatively poor. But higher returns entail higher risk. By taking into account risk and valuations, our analysis suggests that the smaller markets of Madrid, Barcelona, Copenhagen and Brussels look to offer good value, along with Stockholm and Paris.