The commercial property market is in something of a “sweet spot” at present, with improved investor confidence and low interest rates supportive of yield falls, and the growing economy likely to kick-start a rental value recovery. After an increase of 4% last year, and driven by further falls in yields, we expect IPD all-property capital values to rise by 8% this year. A rent-driven gain of 5% is likely in 2015. This translates into total returns of about 14% and 11% respectively. These forecasts are both above consensus and unchanged from the previous Analyst.
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