Skip to main content

Slower recovery in values given weaker office outlook

As widely expected, Q2 brought a range of disappointing data, from plunging investment volumes to further falls in retail rents. And while property values outside of retail have generally held up so far, fragile occupier demand and rising vacancy suggest that it is just a matter of time before weakness in activity weighs on them too. Beyond the immediate hit from COVID-19, we expect a shift to more remote working will delay the recovery in the office sector, in contrast to our previous view that values would rebound. Meanwhile, we think that the only gradual recovery in consumer spending and growing popularity of ecommerce will continue to act as a headwind for retail. In comparison, we expect the drop industrial values this year to be more than regained in 2021. The upshot is that industrial is set to continue to outperform over the next five years.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access