UK commercial property investment to catch-up with US as rates fall back

A divergence in risk-free interest rates in the UK and US since the end of 2024 has led to a marked difference in the level of commercial property investment between the two countries, in part because of the impact on capital value expectations. But we expect 10-year government bond yields to reconverge by the end of this year and US capital value growth to underperform the UK, which will help UK transactions growth to catch up with the US by the end of 2027.