Reflecting the solid economic outlook, commercial property rental values should continue to grow steadily over the forecast period. Yields are also now likely to fall by more this year than we previously envisaged. This means that the current sweet spot is not over yet, and capital values are on track to grow by a strong 12% in 2014. The flipside, however, is that this effectively “brings forward” returns and the capital value gains in 2015-16 will be smaller than otherwise.
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