The stance of monetary policy is likely to stay exceptionally loose for the foreseeable future. And coupled with low inflation, we expect bond yields to stay lower for longer. Therefore, it seems increasingly likely that prime property yields can continue to fall in the next few years. And, although the rental growth outlook is not particularly dynamic, the net effect will be that capital values trend higher in 2015-17. The best return prospects are in the Emerging European markets, albeit generally with higher commensurate risks. Across the sectors, industrial property is expected to outperform.
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