As in the euro-zone, the rise in prime property yields in Scandinavia slowed sharply in Q1 after the surge in H2 2022. Along with decent gains in rents, where Oslo offices and industrial saw the fastest growth, this meant that the decline in capital values slowed. In contrast, flat office and industrial rents meant that price falls accelerated in Switzerland. But, with rent growth forecast to continue slowing this year and yields expected to edge higher as interest rates rise, capital values are in for further falls. And although the correction has been roughly even so far across sectors in Scandinavia, we think office values will fare worst this year.
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