Occupier demand is strong in all three sectors, with solid economic growth supporting expansion, although we expect this to slow through the course of the year, dampening rental growth in all sectors. Retailers are facing pressures on costs and, with supply in the sector having increased in recent years, rents are under downward pressure. In Q1, retail rents were flat or down, while there was less growth in the other sectors than in recent quarters. There are likely to be further falls in retail rents this year. First quarter investment activity was lower than in the same period last year and few markets saw yields decline. For retail, yields have started to rise as investors re-price the sector’s risks, in line with our predictions for this year.
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