The ever-changing economic effects of COVID-19 mean that the impact on real estate markets is highly uncertain. It is clear that the sharp contraction in economic activity and deterioration in sentiment over the first half of the year will weigh heavily on rents and put upward pressure on property yields across the board. That said, if the virus is brought under control, we expect rental growth to bounce back next year and, aside from retail, yield rises will be more than reversed. However, a weaker recovery can’t be ruled out, which poses downside risk to the outlook.
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