Solid outlook for returns despite a handful of downgrades

The non-euro-zone economies and property markets have generally started the year positively. We expect further improvement in GDP growth in most countries to support expansionary occupier demand, with prime space initially being the greatest beneficiary. In turn, this is likely to underpin the resolve of existing and new equity sources to invest into the asset class. This reinforces our belief that total returns will be strong in the next two years, averaging 10.4% in Emerging Europe (ex-Russia) and 9.3% in Western Europe (ex-UK).