Retail shines in a disappointing recovery

Below-trend economic growth and high interest rates will continue to weigh on all-property total returns, which we think will average just 5.5% p.a. over 2026-30. Of the major sectors, we think retail is best placed to outperform thanks to a relatively-high income return, with returns of 7.0% over 2026-30. Residential returns should reach 6.0% p.a. thanks to solid rental growth expectations, but we expect office and industrial to trail at around 5.0% p.a. This quarter also marks the addition of senior housing and self-storage forecasts, where we expect the strongest (at 11% p.a.) and the weakest performance (at 3.3% p.a.) respectively.