After a stellar first six months, rising interest rates and a slowing economy brought commercial property returns crashing down in the second half of 2022. All-property total returns are therefore set for their worst year since 2008. And 2023 will not be much better. While risk-free interest rates have peaked, property remains overvalued and yields will see further gains, and the economic recession will lead to falls in rents. We expect all-property total returns to come in at around -2%, with offices and industrial underperforming at around -3% and retail the only sector avoiding a negative outturn.
Drop-Ins: Property markets in 2023: We’re holding two special 30-minute briefings on the 2023 housing and commercial property outlooks on Tuesday, 17th January, covering first the UK and Europe and then the US. Click below to register for either or both sessions:
UK/Europe outlook (09:00 GMT/17:00 SGT)
US outlook (11:00 EST/16:00 GMT)
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