CoStar Data Shows Office Yield Gap Narrowing Between London and the Big Six
CoStar Data Shows Office Yield Gap Narrowing Between London and the Big Six
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basis pointsfinancial
Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.
yield spreadfinancial
Yield spread is the difference in interest rates (yields) between two bonds, typically comparing a riskier bond to a safer benchmark like government debt. It matters to investors because it shows how much extra return is required to accept additional risk or uncertainty—like the price premium someone pays for a higher‑risk car insurance policy—and shifts in the spread signal changing views on credit quality, liquidity, or the economic outlook.
transaction-basedfinancial
Transaction-based describes a business model or metric where revenue and activity depend on individual transactions — the company earns money each time a sale, trade, booking or similar event occurs. Like a toll booth that charges per car, this model ties income directly to the number and size of transactions, so investors watch transaction volume, average value and per-transaction margin to judge growth, seasonality and sensitivity to changes in customer behavior.
3d digital twin technologytechnical
3D digital twin technology creates a detailed, virtual replica of a physical object, system, or environment by combining 3D models with real-time sensor and data feeds. Investors care because these replicas let companies test changes, predict failures, and optimize performance without interrupting operations—think of a flight simulator for factories or buildings—and can reduce costs, speed development, and reveal new revenue or efficiency opportunities.
LONDON--(BUSINESS WIRE)--
Improving investor sentiment narrows the office yield gap between London and major regional markets,according to data from CoStar, a global leading provider of online real estate marketplaces, information and analytics in the property markets.
Softening pricing in London as office yield spread with the regions narrows
Based on a three-quarter trailing average, London’s transaction-based office yield rose 50 basis points to 6.5% in Q1 2026, up from 6% in Q4 2025 and a recent low of 5.8% in Q3 2025.
“Average office yields outside London fell slightly after reaching a 12-year high at the end of 2025, with regional yields declining by 30 basis points in Q1 2026, though remaining elevated at 10.3%,” said Mark Stansfield, senior director of market analytics at CoStar Europe. “The yield spread between London and the regions narrowed to 370 basis points, from 480 basis points two quarters ago, but remains historically wide.”
Average central London office yields rose by 30 basis points to 5.7%, while Big Six office yields compressed by 30 basis points to 8.8%.
“The yield spread between central London and the Big Six narrowed to 310 basis points,” said Stansfield. “This is down from 430 basis points two quarters ago, when the gap reached its widest this century.”
Retail yields held at 7.1%, while industrial yields compressed by 20 basis points to 6.9%, halting the increases seen throughout 2025.
For more information about the company and its products and services, please visit www.costargroup.com.
About CoStar Group
CoStar Group (NASDAQ: CSGP) is a global leader in commercial real estate information, analytics, online marketplaces, and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.
CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; Homes.com, the fastest-growing residential real estate marketplace; and Domain, one of Australia’s leading property marketplaces. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible; STR, a global leader in hospitality data and benchmarking; Ten-X, an online platform for commercial real estate auctions and negotiated bids; and OnTheMarket, a leading residential property portal in the United Kingdom.
CoStar Group’s websites attracted over 131 million average monthly unique visitors in the first quarter of 2026, serving clients around the world. Headquartered in Arlington, Virginia, CoStar Group is committed to transforming the real estate industry through innovative technology and comprehensive market intelligence. From time to time, we plan to utilize our corporate website as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
