We expect the robust investment activity seen last year, particularly in H2, to persist into 2022. Although this has competed yields to record lows in the industrial and apartment sectors, we still see further room for yield falls this year in all four sectors. This will see returns at the all-property level reach around 12% in 2022. Thereafter, we think that slowing economic growth and rising short-and-long interest rates will put upwards pressure on property yields. As a result, returns fall back to a still-respectable 6% in 2023 and then a much weaker 2.5%-3% p.a. over 2024-26. While we firmly expect industrial to be the outperformer this year, with returns of 20%, performance will drop sharply from 2023. As a result, the winner over the full period is forecast to be retail, with total returns of 7% p.a., led by power centres.
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