Solid occupier markets to support capital values - Capital Economics
UK Commercial Property

Solid occupier markets to support capital values

UK Commercial Property Outlook
Cancel X

Given the prevailing level of risk-free rates, it is hard to make a compelling case that commercial property is overvalued as an asset class. Admittedly, valuations in some segments, such as offices in London and the South East, look rather more stretched than the all-property average, so yields here may be the most vulnerable to any rise in rates or shifts in investor sentiment.

But if we are right that the economy will surprise on the upside, underpinning occupier demand and rental values, and that any rises in interest rates and risk-free rates will still leave them low by pre-financial crisis standards, then it seems unlikely that the commercial property market is about to suffer another correction.