LONDON--(BUSINESS WIRE)--May 22, 2026--
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.
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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.
The full analysis can be found here.
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.
Softening pricing in London as office yield spread with the regions narrows
JAKARTA, Indonesia (AP) — Indonesia is overhauling its trade policies for key commodities in a sudden move that some experts liken to a hostile takeover of major industries in the resource-rich nation, with global implications.
The new regulation announced to parliament Wednesday by Indonesian President Prabowo Subianto mandates that a recently set up state-owned enterprise will handle the country's exports of coal, palm oil and iron alloys by September.
Prabowo said one aim is to increase tax revenues. That would help restore dwindling government reserves that have been exhausted by the energy shocks from the war in Iran. Given Indonesia's role as a major commodities exporter, the new rules likely will ripple across international supply chains.
Indonesia is the largest exporter of thermal coal, which is burned for energy, and palm oil, a key ingredient in everything from cosmetics to biofuels. The Southeast Asian nation of roughly 287 million people also has the world's biggest known reserve of nickel, a mineral needed for electric vehicle batteries and stainless steel.
As Indonesia's largest trading partner, China will feel the brunt of this policy pivot, experts said.
China is closely watching Indonesia’s “initiative to nationalize” and considering “how it would impact China’s further cooperation,” said Lei Xie with the UK-based think tank Third Generation Environmentalism. “The future path that Indonesia is taking is highly important for China.”
The swiftness of the new rule's implementation could affect access to needed resources for China's clean technologies industries, which use Indonesian commodities to supply growing demand for renewable energy. Chinese companies are major investors in many Indonesian industries, including critical minerals.
“Indonesia has become vital to China" since it supplies the commodities that "underpin China’s dominance in electric vehicles, batteries, and industrial manufacturing,” said Li Shuo with the US-based Asia Society Policy Institute’s China Climate Hub. “But the relationship is evolving.”
If handled well, the centralization of Indonesia's trade may also open the door to more American investment, analysts said, as it competes with China for key resources.
“Such a move is a clear signal that U.S. investment is being attracted to come to Indonesia even more,” said Bhima Yudhistira with the Jakarta-based Center of Economic and Law Studies. He called the new policy a “hostile takeover” that will mean every contract in industries controlled by China may be revised.
Prabowo told lawmakers Indonesia had lost as much as $908 billion because exporters underreport their sales to avoid paying taxes and other fees.
“The primary objective of this policy is to strengthen oversight and monitoring — and to combat under-invoicing, transfer pricing and the diversion of export proceeds,” he said.
The new entity taking over Indonesia's exports of these commodities — PT Danantara Sumberdaya Indonesia — was officially registered the day before Prabowo's announcement. It is 99% owned by Danantara, the sovereign wealth fund the president launched last year, and will strengthen the government's influence on setting the price of its commodities.
This “represents a governance reform, a step toward strengthening our credibility in managing strategic commodity trade in an orderly and accountable manner,” said Yvonne Mewengkang with Indonesia’s Ministry of Foreign Affairs.
From June to August, private companies are expected to turn over their import and export transactions to Danantara, which by September should manage all trade transactions with foreign buyers.
“There will be an explanation for investors later, so that stakeholders will be informed before June 1," said Airlangga Hartarto, the coordinating economic minister in Indonesia. “After all, in the initial phase, we are focusing on transparency in reporting.”
Trade analysts are skeptical that the government will be able to seamlessly take over trade in all those industries within less than four months.
China is Indonesia's top trading partner and one of its biggest sources of foreign direct investment.
Chinese firms dominate Indonesia's nickel industry and China is a top importer of the resources affected by the trade takeover.
Other major importers of Indonesian palm oil, coal and nickel include the U.S. and the European Union. India, Japan and South Korea and neighboring Malaysia, Vietnam and the Philippines would also be affected.
Under Prabowo, the government has been increasing control over strategically important commodities, cracking down on unauthorized mining operations, taking over plantations and pushing for the development of a domestic refining industry for critical minerals.
Even before Prabowo's announcement, the China Chamber of Commerce in Indonesia sent a five-page protest letter last week highlighting investors' concerns about Indonesia's unstable business climate.
Chinese enterprises recently have faced “excessively stringent regulation, over-enforcement, and even corruption and extortion by competent authorities,” the letter said. This has “severely disrupted normal business operations" and “undermined long-term investment confidence."
“Prabowo didn’t listen to the complaint from these Chinese companies and then did something very, very shocking with this new body to control the export,” said Yudhistira with CELIOS.
By exerting state control over key industries, Indonesia is trying to diversify its investors, according to Yudhistira. Reducing Chinese control may attract interest from others, like the U.S.
This will only intensify the race for resources between the two superpowers, he warned.
Whether this new policy does attract new investors, however, will depend on the transparency of its implementation, said Syahdiva Moezbar with the Finland-based Centre for Research on Energy and Clean Air in Jakarta.
Private businesses say they are still in the dark.
Danantara's impact on small-volume trade, specialized product exports and downstream industries still needs to be spelled out, according to Eddy Martono, chairman of the Indonesian Palm Oil Association.
“Exporters usually already have their own established markets," he said. “We must ensure we do not lose these markets if they are not managed properly.”
Delgado reported from Bangkok.
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FILE - A man uses a motorcycle to transport palm fruit at a plantation in Polewali Mandar, South Sulawesi, Indonesia, April 21, 2024. (AP Photo/Yusuf Wahil, File)
FILE - A farmer walks near palm oil trees at a plantation in Central Mamuju, Sulawesi Island, Indonesia, Feb. 25, 2025. (AP Photo/Dita Alangkara, File)
FILE - A boat cruises past a coal piled up on a barge on Mahakam River in Samarinda, East Kalimantan, Indonesia, Dec. 19, 2022. (AP Photo/Dita Alangkara, File)
FILE - Men load palm fruit onto a truck at a palm oil plantation in Polewali Mandar, South Sulawesi, Indonesia, April 23, 2024. (AP Photo/Yusuf Wahil, File)
FILE - Tug boats pull barges fully loaded with coal on the Mahakam river in Samarinda, East Kalimantan, Indonesia, on Dec. 19, 2022. (AP Photo/Dita Alangkara, File)
