2026-02-05-莱坊-Investment_Yield_Guide_February_2026_4页_557kb

Prime Yield Guide – February 2026 Summary

Document Overview

This document is a Prime Yield Guide published by Knight Frank Intelligence on 04 February 2026, providing indicative yield data for various real estate sectors in the UK. It is based on rack rented properties and disregards bond type transactions. The guide aims to give market insights and is intended for investors, developers, and other stakeholders in the commercial real estate sector.

Core Content and Key Sectors

1. High Street Retail (Institutional Lot Sizes)

• Yields (Feb-26): 2.75% - 3.00% (Bond Street), 4.50% (Oxford Street), 6.50% (Prime Towns), 7.00% (Regional Cities), 10.00% (Good Secondary)
• Sentiment: POSITIVE for most areas
• Notes: Yields for Prime Towns and Regional Cities show a -0.25% decrease from previous months, while Good Secondary yields remain STABLE.

2. Shopping Centres (Sustainable Income)

• Regional Scheme: 7.50%
• Sub-Regional Scheme: 8.75% - 9.00%
• Local Scheme (Successful): 9.50% - 10.00%
• Neighbourhood Scheme (Assumes <25% from supermarket): 10.00% - 10.00%
• Sentiment: POSITIVE for all schemes

3. Out of Town Retail

• Open A1 Parks: 5.25% - 5.50%
• Good Secondary Open A1 Parks: 6.50% - 6.75%
• Bulky Goods Parks: 5.50%
• Good Secondary Bulky Goods Parks: 6.50% - 6.75%
• Solus Open A1 (15 year income): 6.00% - 6.00%
• Solus Bulky (15 year income): 6.00% - 6.00%
• Sentiment: STABLE for all listed areas

4. Foodstores

• Annual RPI Increases [NIY] (20 year income): 4.75%
• Open Market Reviews (20 year lease, 5 yearly reviews): 5.75%
• Discounters (20 years, 5 yearly indexation): 4.75% (Feb-25) to 4.50% (Feb-26)
• Sentiment: POSITIVE for all listed areas

5. Leisure

• Prime Leisure Parks: 8.00%
• Good Secondary Leisure Parks: 9.00%
• Sentiment: STABLE

6. Offices

• City Prime (10 years): 5.25% - 5.50%
• West End: Prime Core (Mayfair & St James's): 4.00%
• West End: Non-core (Soho & Fitzrovia): 4.00% - 4.75%
• Major Regional Cities (10 years): 6.50%
• Major Regional Cities (5 years): 7.50%
• Secondary, Regional Cities: 11.00% +
• South East Towns (10 years): 7.25%
• South East Towns (5 years): 8.25%
• South East Business Parks (10 years): 8.00% +
• South East Business Parks (5 years): 10.50% +
• Sentiment: POSITIVE for City Prime and West End Prime Core, STABLE for most other areas, NEGATIVE for Secondary, Regional Cities and South East Business Parks

7. Warehouse & Industrial

• Prime Distribution / Warehousing (20 years [NIY], higher OMV/index): 5.00%
• Prime Distribution / Warehousing (15 years, OMRRs): 5.25%
• Secondary Distribution (10 years, OMRRs): 6.00%
• Greater London Estates: 4.75%
• South East Estates: 5.00%
• Good Modern Rest of UK Estates: 5.00% - 5.25%
• Good Secondary Estates: 6.50% - 7.00%
• Sentiment: STABLE for all listed areas

8. Specialist Sectors

• Car Showrooms (20 years with indexed uplifts & dealer covenant): 6.00%
• Budget Hotels London (20 years, 5 yearly indexed reviews): 4.50% - 4.75%
• Budget Hotels Regional (20 years, 5 yearly indexed reviews): 5.00% - 5.25%
• Student Accommodation Prime London (25 years, Annual indexation): 4.00% (Feb-25) to 4.00% + (Feb-26)
• Student Accommodation Prime Regional (25 years, Annual indexation): 4.25% (Feb-25) to 4.25% + (Feb-26)
• Healthcare (Not for Profit Operator, 30 years, Annual indexed reviews): 4.50% (Feb-25) to 4.25% - 4.50% (Feb-26)
• Healthcare (SPV credit, 30 years, Annual indexed reviews): 5.75%
• Data Centres (Leased, 15 years, Annual indexation): 5.00%
• Life Sciences (15 years): 4.75%
• Income Strips (50 years, Annual RPI / CPIH+1% RRs, Annuity Grade): 4.00% (Feb-25) to 4.00% + (Feb-26)
• Ground Rents (125 years, Annual RPI / CPIH+1% RRs, <15% EBITDA cover, Vacant Possession cover <40%): 3.50% (Feb-25) to 3.50% + (Feb-26)
• Sentiment: STABLE for all listed areas

Key Market Insights

• Base Rate Expectations: The Bank of England base rate is expected to remain at 3.75% in February 2026. Economists anticipate two additional quarter-point cuts by year-end, bringing the rate down to 3.25%.
• Global Investment Trends: The UK has become the second largest destination for cross-border CRE investment in 2025, behind the US. It is expected to be the leading global destination for capital in 2026, with 60% of respondents in Knight Frank’s Active Capital survey targeting the UK.
• UK CRE Lending: Net lending to UK commercial real estate rebounded to post-pandemic levels, reaching £2.47bn in December 2025, and the three-month rolling total reached £6.69bn, its highest since May 2020.
• Bond and Rate Trends:
  • Bank of England Base Rate: 4.75% (Feb-25) to 3.75% (Feb-26)
  • 5-year SONIA Swap Rate: 3.92% (Feb-25) to 3.76% (Feb-26)
  • 10-year Gilt Redemption Yield: 4.51% (Feb-25) to 4.58% (Feb-26)
  • 10-year Indexed Gilt Yield: 0.97% (Feb-25) to 1.48% (Feb-26)

ESG and Intelligence Lab Updates

• Connection Reform Update: A new pipeline was announced, indicating ongoing ESG initiatives.
• Industrial and Logistics Outlook 2026: The Intelligence Lab report suggests a cautious optimism for the sector, highlighting sustainable growth and long-term investment potential.

Key Research Highlights

• London Offices Spotlight: A quarterly summary of the state of the London office market, indicating its current performance and trends.

Knight Frank Expertise

Knight Frank offers expertise in the following sectors:

• Waste and Energy
• Infrastructure
• Garden Centres
• Film Studios
• Serviced Offices
• Data Centres
• Life Sciences
• Income Strips
• Ground Rents
• Trading Assets
• Expert Witness
• IPOs

Key Contacts

• Emily Miller – Partner, Valuation & Advisory, Head of UK Fund
• Simon Gillespie – Partner, Valuation & Advisory, Head of Central London Valuations
• Matthew Dichler – Partner, Valuation & Advisory, UK Fund Valuations
• Jeremy Tham – Partner, Valuation & Advisory, Head of Real Estate
• Chris Galloway – Partner, Valuation & Advisory, Head of Business Development UK Fund Valuations
• Will Matthews – Partner, Research, Head of Commercial

All contacts provide professional support in valuation, advisory, and research services.