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Softer rental growth outlook will be offset by further yield compression

In the wake of the UK’s vote to leave the EU, central banks have signalled a looser monetary policy stance ahead. Nevertheless, we expect economic growth to be weaker, which has led us to reduce our rental growth forecasts in most markets. But, looser monetary policy will enable property yields to move still lower, driving stronger capital value growth. The UK, where our forecasts have been downgraded, is the exception.

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