Expect no change in euro-zone office yields until 2022

The slowdown in euro-zone growth means that rental growth will be weaker and that bond yields are likely to be lower. The net effect of these factors is a downward revision to our forecasts for office yields, which we now expect to be below their current levels by the end of 2021, providing that the euro-zone does not experience a recession. Although softer rental growth will limit capital value gains, total returns of around 5% p.a. in 2019-21 will look attractive on a relative basis.