CEE yields continued to rise in Q4, but very strong rental growth prevented all-property capital values from falling for a second successive quarter. This turnaround was driven by retail and industrial performance, while office rents fell. Looking forward, stretched valuations point to further yield hikes. And with the economic outlook weak, the evidence suggests that the Q4 rental spike may be a one-off. As such, we expect further declines in capital values during 2023.
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