How much scope is there for European office rents to rise?

In recent years, across Europe, yield compression has been by far the largest driver of capital value growth. Yet property yields are fast approaching their limit. That means we now need to see a pick-up in rental growth, not only to keep capital values rising, but also to meet the implicit income assumptions already priced in. Encouragingly, even for those cities with the weakest occupier fundamentals, rents seem set to rise over the coming years.