Our forecast is that all-property total returns will decline from 15% in 2010 to around 8.5% this year, before easing down to between 6% and 7% in both 2012 and 2013. This subdued outlook reflects our view that, while the property market is not starting from a point that is obviously too cheap or expensive, the weak economic backdrop will limit the scope for rental value growth. At the sector level, reflecting the recent surge in the development pipeline, we think there is now a very real risk that Central London office rents and prices will begin to fall in 2013.
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