Euro-zone prime office yield convergence: a temporary phase?

Since mid-2007, the yield gap for prime office property in five of the euro-zone’s larger office markets has narrowed sharply. To us, this convergence suggests that, to date, investors have not placed much emphasis on the different demand and supply prospects in individual markets. But we think such considerations will become more important over the remainder of this year. As a result, we do not expect yields to remain so tightly grouped.