The retail and warehousing real estate sectors saw the highest yield among the different commercial property types in Ireland in 2023. Conversely, rental homes had the lowest yield, reflecting the lower risk associated with investing in that property type. The net equivalent of the retail and industrial sectors in the second quarter of the year was **** percent. Private rental homes had **** percent lower yields, at *** percent.

The prime yields in the UK expanded across most property types between 2022 and 2025. In April 2025, yields were the lowest in the London West End offices market at *****percent. In contrast, shopping center yields stood at ****percent. Yield is an indicator for the expected return of a property investment and is calculated as the ratio of rental income and the property value. Several factors can drive yields - increased demand could raise property values, causing lower yields, while a fall in demand could create the opposite effect. Which is the largest commercial real estate sector in the UK? Office real estate has traditionally accounted for the lion’s share of the commercial property investment market, but since the start of the COVID-19 pandemic, investors’ interest has shifted towards industrial real estate. With the e-commerce sector growing and supply chain management becoming more important than ever, so has the industrial and logistic sector. This increase in importance is also reflected in the occupiers market, with the annual take-up exceeding the ten-year average for three years in a row. How is the commercial property market expected to develop in the coming years? The industrial and logistic property market is forecast to outperform retail and offices in terms of capital value growth in the period between 2025 and 2028. According to the same forecast, rental growth is expected to turn positive for all property types in 2025, except for shopping centers.

Prime yields increased for all property types in the commercial real estate sector in Germany between 2021 and 2023. Multifamily housing had the lowest yield as of the third quarter of 2023, at *** percent. Conversely, and the highest for shopping centers, amounting to *** percent.

Between 2025 and 2029, shopping center space rent is expected to see the highest annualized return on investment among different types of commercial properties in the UK. Total returns look at the expected rate of return on a real estate investment. On the other hand, industrial properties are not only forecast to see the highest commercial real estate rental growth, but also the highest capital value growth by 2029.

In Czechia, hotels were the commercial properties with the highest prime yields in 2024. The prime yield of hotel real estate was *** percent, while shopping centre and office followed at ****. For industrial real estate, it stood at **** percent.

Prime yields in the commercial real estate market in the UK increased the most for office real estate in the second half of 2023. The yield shift amounted to 0.46 percent, which was about five times the increase for retail real estate. The prime yields for different property types vary widely across the different markets in the UK.

Commercial real estate in the UK is expected to see an annualized total return of *** percent between 2025 and 2029. During that period, capital values are forecast to grow faster than rents. Within the sector, shopping center, industrial, and retail warehouse real estate stands out as the commercial property type with the highest total returns.

In all property sectors in Central and Eastern European capital cities, prime yields were the highest in the Bulgarian capital, Sofia, in the fourth quarter of 2024.

Industrial multi-lets and industrial distribution properties had the lowest yields in the industrial real estate sector, amounting to **** percent in February 2025. Conversely, yields were the highest for retail warehousing (restricted), at ************* Yield is an indicator for the expected return of a property investment and is calculated as the ratio of rental income and the property value. Several factors can drive yields — increased demand could raise property values, causing lower yields, while a fall in demand could create the opposite effect. Overall, yields expanded across all commercial property types in 2023.

Yields for prime office real estate in Europe in 2025 were the highest in New Castle and Sofia, and the lowest in Geneva and Zurich. In the first quarter of the year, Newcastle recorded net prime yield of ***** percent. Conversely, the prime yield in Zurich stood at *** percent. Yield is an indicator for profitability, with higher yields suggesting higher return. Nevertheless, that comes with higher risk for investors. Competitive markets, where prices also tend to be higher, tend to have lower yields.

Prime industrial property had the lowest investment yield among different commercial real estate types in Cape Town, South Africa in 2024. Yield measures the expected return of an investment property and is calculated as the annual rental income divided by the property value. Investors expected a return on investment of *** percent for prime industrial properties, while for rental housing this figure was *** percent.

Retail properties had the highest capitalization rates in the United States in 2023, followed by offices. The cap rate for office real estate was **** percent in the fourth quarter of the year and was forecast to rise further to **** percent in 2024. Cap rates measure the expected rate of return on investment, and show the net operating income of a property as a percentage share of the current asset value. While a higher cap rate indicates a higher rate of return, it also suggests a higher risk. Why have cap rates increased? The increase in cap rates is a consequence of a repricing in the commercial real estate sector. According to the National NCREIF Property Return Index, prices for commercial real estate declined across all property types in 2023. Rental growth was slow during the same period, resulting in a negative annual return. The increase in cap rates reflects the increased risk in the investment environment. Pricing uncertainty in the commercial real estate sector Between 2014 and 2021, commercial property prices in the U.S. enjoyed steady growth. Access to credit with low interest rates facilitated economic growth and real estate investment. As inflation surged in the following two years, lending policy tightened. That had a significant effect on the sector. First, it worsened sentiment among occupiers. Second, it led to a decline in demand for commercial spaces and commercial real estate investment volumes. Uncertainty about the future development of interest rates and occupier demand further contributed to the repricing of real estate assets.

The initial prime yield of logistic real estate in France in 2024 increased by 1.75 percentage points since 2019, the year with the lowest yield. In the first quarter of 2024, the initial prime yield for logistics properties amounted to 4.75 percent.

In all property sectors in Central and Eastern European capital cities, *************** had the highest office and retail rents in the fourth quarter of 2024.

The investment yields of warehouse and industrial space in the UK softened slightly in 2025, after having increased notably in 2023. As of May 2025, yields were the highest for good secondary estates, at ***** percent. Conversely, prime distribution and warehousing properties with a lease term of 20 years and a higher open market value had the lowest yield, at **** percent.

The need for office space in Australia’s expanding cities has drawn investors to commercial property, with many wanting to cash-in on strong capital growth rates in the office segment. In the first quarter of 2021, the office yield rate in the central business district of Perth, Australia was around *** percent. This was the highest rate across all states in Australia and the second highest yield rate was in Perth, Australia.

What is office yield?

In terms of commercial property, the yield represents the expected return on investment on a property. For investors, this is an important value as it indicates future income on an investment. Yield can be based on a property’s market value, annual income, and running costs. Capital growth, however, is not included in the calculation. The office yield was the lowest in Sydney. The vacancy rate in the CBD office market was also the lowest in Sydney compared to other major Australian cities.

Growth in the office segment

In 2019, Australia showed strong growth as a destination market for cross-border commercial real estate investment inflows in Asia Pacific. In the same year, transaction volumes reached a high in the office segment, with this segment also accounting for the highest share of foreign investment in commercial property. In addition, megadeals (greater than *** million Australian dollars) reached a peak, solidifying the importance of the office segment in the commercial real estate industry in the country.

Prime yields for high street retail properties in the UK have increased since 2019. As of June 2025, yields were the highest for good secondary properties in markets such as Truro, Leamington Spa, Colchester, and the lowest on Bond Street in London. High street shops on Oxford Street in London had a prime yield of *** percent.

Amid a worsening economic climate, the value of commercial real estate investment in the U.S. plummeted in 2023, with a mild increase in 2024. According to industry professionals, the biggest factors impacting the real estate industry in 2025 are the ************************and*******************************. Development of commercial real estate cap rates in the U.S. Cap rates started to increase in 2022, reflecting a decline in property values. According to the forecast, cap rates for commercial real estate are expected to peak in 2024, followed by a steady decline. Cap rates measure the expected rate of return on investment properties and are calculated by dividing the net operating income of the property by the current asset value. While a higher cap rate indicates a higher rate of return, it is also associated with higher risk. Which property type has the best development prospects? In 2025, the development opportunities in the commercial real estate sector deemed the best for single-family real estate. Industrial and distribution real estate, including warehouses, factories, and big box distribution centers, was also ranked high.

In Portugal, retail real estate prime yield increased the most during the observed period for shopping centers. In 2018, the prime yield stood at five percent, and by 2024, it had grown to six percent. High street retail real estate also grew from **** percent in 2019 to five percent in 2024. Retail park prime yield was the most stable, measured at ***** percent in 2023 and 2024.

The United Kingdom emerged as the market with the highest forecast annual total return between 2024 and 2029. According to a September 2024 forecast, commercial real estate in the UK is expected to yield a total return of *** percent in the next year. Nevertheless, during the five-year period, the total return is expected to be slightly lower, at *** percent annually. According to another forecast from May 2024, industrial facilities and retail warehouses emerged as the commercial property types with the highest projected returns.