Second lockdown a further blow to retail

The industrial sector aside, investment activity and occupier demand failed to recover from sharp Q2 falls in Q3, even as lockdown measures were eased. Indeed, in the retail sector, the fall in prime rents gathered pace and yields edged up. In sharp contrast, industrial rental growth picked up in Q3. With the second virus outbreak triggering widespread lockdowns across the euro-zone, which are expected to last into next year, we forecast further declines in property values, particularly for retail. As such, despite the potential boost to economic activity from the latest vaccine development, we cannot yet discount further repricing in property markets.