This yield guide is for indicative purposes only and was prepared on 04 June 2026 by Knight Frank Intelligence. It focuses on rack rented properties and disregards bond type transactions. The guide is valid as of the publication date but highlights the impact of heightened geopolitical tensions from the Middle East conflict, which may lead to rapid shifts in investor sentiment. The current assessment indicates cautious investor behavior amid an evolving market environment.
Key economic indicators:
- The UK labour market is weakening, with PAYE employment falling by 100,000 in April, leaving payrolls 0.7% lower year-on-year. Headline earnings rose to 4.1%, but underlying growth is softer due to bonus effects, with pay excluding bonuses easing to 3.4%.
- Household energy costs are expected to rise by 13% in Q3, aligning with April 2025 levels, despite a 60% increase in gas prices. This moderates inflation outlook, reinforcing the view of restrictive policy even as growth risks build.
- UK commercial property delivered an annualised total return of +6.33% in April 2026, showing resilience despite early effects from the Middle East conflict. Future returns are likely driven more by income and rental growth than capital appreciation.
ESG focus:
- The report emphasizes a shift from real estate to real assets, with infrastructure in the spotlight.
Contact information:
- The guide provides contact details for Knight Frank's valuation and advisory team members.
Overall, the guide offers an indicative overview of prime yield trends while acknowledging the volatility and uncertainty in the current market environment.
