The apartment market is set for a stellar year. The reopening of cities is bringing vacancy rates down and pushing rents up, and strong investor demand has led to a sharp fall in yields. We expect national total returns of around 19% in 2021. The six major cities in this Outlook, which saw relatively large falls in capital values in 2020, will not quite match that this year. But most will catch-up in 2022 and beyond. Total returns in D.C. and Boston will outperform the national average of 7% p.a. from 2021-25, and L.A., NYC and Chicago will broadly match that return. The exception is San Francisco, where an exodus of footloose tech workers and high rents have cut demand. Even so, we still expect some recovery in demand, with rent growth turning positive and total returns of close to 5% p.a. from 2021-25. In view of the wider interest, we are also sending this US Commercial Property Outlook to clients of our US Housing service.
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