Reversal in capital growth likely in H1

After stabilising at the start of the year, all-property capital values grew slightly in February. But we don’t think this spells the start of a sustained recovery over the next few months. After all, virus restrictions are only expected to unwind gradually in Q2, which means the near-term outlook for both the economy and property remains weak, particularly in the retail and leisure sectors. We think this will weigh on all-property capital values in the first half of the year.