Property markets to weather economic challenges - Capital Economics
UK Commercial Property

Property markets to weather economic challenges

UK Commercial Property Outlook
Written by Capital Economics Economist
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Capital value growth is expected to turn negative next year as rental increases remain subdued and property yields inch higher. But solid economic growth, combined with expectations of a gradual interest rate tightening mean that the sector will experience only a moderate drop in capital values.

Nominal returns are expected to average 4.5% a year for all-property over the coming years, modest by historical standards. Sector performance will be uneven with retail (notably regional high streets and shopping centres) and central London and South East offices underperforming, while industrial and leisure see the strongest returns.