Competition for industrial assets bids down yields

With the faster pace of vaccination paving the way for a rebound in economic activity, the prospects for occupier markets have improved. However, structural changes mean that the recovery in the office and retail sectors will be gradual. In contrast, we expect the industrial sector to benefit from higher demand as the economic recovery gets underway and healthy online spending. These divergent sectoral prospects were clear in investors’ pricing decisions in Q1, when they continued to bid down prime industrial yields, while office and retail yields held broadly steady.