Annual returns were just 2.1% in December, the lowest monthly figure since 2010. A marginal rise in yields in the retail sector caused all-property capital values to fall in December and was exacerbated by a slight fall in all-property rental values. (See Chart 1.) Nevertheless, we expect rental value growth to improve and capital values to decline at a slower pace, which will lead to a pick-up in total returns to 3.8% this year.
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