If we are right that the euro-zone economy will continue to weaken, the drag on economic activity in non-euro-zone European economies is likely to intensify. As a result, occupier markets in non-euro-zone economies will soften, meaning that rental values will fall modestly or, at best, stagnate next year. Combined with a general rise in risk aversion, weakening occupier markets will put some upward pressure on property yields. But capital values in non-euro-zone economies will typically prove more resilient than those in the single currency area.
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