War in Ukraine adds to uncertainty; retail most at risk

While the direct impact of the war in Ukraine is likely to be small, we think there will be indirect consequences for euro-zone commercial property markets. Economic growth is expected to be slower, which will weigh on property demand. But as much of the slowdown is likely to come from lower consumer spending, we think there will be a more material impact on rental growth in the retail sector this year. Inflation is also likely to be even higher, and we now expect the ECB to start raising interest rates by the end of the year. However, with the spread to bond yields still wide, we think there is further scope for property yields to fall over the next couple of years before they edge up from 2024. Long Run Outlook Drop-In (23 March, 11:00 EDT/15:00 GMT): What will be the lasting impacts of the war in Ukraine? What legacies will the pandemic leave? What does a future of higher inflation mean for economies and markets? Neil Shearing hosts this special discussion with senior economists about the long-term investing outlook on Wednesday. Register here.