European office market sees return of big deals

Large transactions are making a comeback in the European office market, according to the “European Investment Office” report by Savills. 

European office prime yields - Savills

In the third quarter of 2025, the average size of European office deals reached €30 mln, a three-year high. The number of large office investments (over €50 mln) also increased by 43% year-on-year, indicating investors are more willing to engage in bigger deals.
Prime office yields in Europe remained steady at 4.87% during this period, with some cities like Dublin and Berlin seeing slight compressions (lower yields).
Cross-border investment in European offices from the EMEA region has also significantly increased by 46% year-on-year, with Norway, Switzerland, the UAE, and Spain being the most active buyers. Even established US investors, typically focused on London, are showing more interest in continental Europe. For instance, Blackstone recently acquired the Trocadero in Paris for around €700 mln in Q3 2025.
With a scarcity of available high-quality office spaces and limited new construction, rents are on the rise. This upward trend in rental income is expected to be the primary factor boosting overall investment returns in the coming year.
Because new developments are scarce, businesses have fewer alternatives when their leases expire. High interest rates also make companies reluctant to spend capital on new locations, leading to a higher rate of lease renewals. This situation allows landlords to increase rents, especially for prime properties.
Investors continue to favor modern office buildings in central, well-connected areas. While political instability and high bond yields still present challenges for deploying capital, the current investment environment is more favorable than a year ago. 
James Burke, director, Global Cross Border Investment at Savills, said: “The quantum and breadth of buyers for European offices has returned, and we are seeing an uptick in the number of underbidders for prime stock. Signs of yield compression for the asset class in selected markets is also drawing a greater number of vendors.”
Mike Barnes, director in Savills' European Commercial Research team, added: “Income returns will continue to be the main driver of total returns over the next twelve months. With a shortage of new office developments taking place, occupiers have few options at lease expiry. Interest rates remain high, and occupiers are hesitant to invest in capex on new premises, and we are thus seeing a higher proportion of lease renewals, providing landlords with opportunities to capture prime rental growth.”