The economic recovery looks well-set, which should support occupier markets. However, structural change in the office sector means that occupier demand continues to fall, even while the beleaguered retail sector is showing improvement. Both of those sectors are set to suffer this year though, and retail’s loss continues to be the industrial sector’s gain, with capital values already up by 3.6% in Q1 against our forecast of 7% for the whole year. With people returning to cities, apartments markets are turning a corner. Not that investors have needed to see this before buying, as the sector has already been the most traded in each of the last two quarters, but it bodes well for our forecast of apartment capital growth of 5% this year.
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