The easing of restrictions is good news for the economy, but some commercial property sectors will be slower to benefit than others. Encouragingly, the property downturn was not as bad as we anticipated and the data for Q1 suggest that we may be close to a turning point. However, with rental growth prospects still poor outside of the industrial sector, we expect limited downward pressure on yields and modest growth in capital values in the near term. Further out, office and retail face structural headwinds, which leaves industrial as the stand-out performer over the forecast horizon.
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