The company’s UK quarterly property snapshot says competitive bidding, combined with a lack of stock, will drive capital values up in the short term.
It said institutional investors were starting to re-enter the market and overseas investors were also raising their buying activity, with the
“We expect a strong rebound in returns over the next nine months, as investors seek to take advantage of property’s high-income return,” said
“This results in a very strong level of projected performance in 2010, with total returns of 16% projected, driven by investor demand driving values strongly higher, despite rents still falling in all sectors.
“Such a strong investment-led bounce in total returns is not unusual however, and we have flagged this as a likely outcome for some time.”
After a strong total return performance in 2010,
“From 2012, rental growth will eventually recover and total returns pick up again, with capital value appreciation accelerating,” the company said.
“This two-stage recovery would be reminiscent of the mid-1990s.”
“Over the next five years, the best performing sector is projected to be shopping centres, aided by a very high income return.
“Shopping centre yields have risen by substantially more than other sectors over the last two years, with their large lot size and the lack of available debt hindering purchasing activity.
“However, over the next five years, there is more potential for yields to fall in this sector than standard shops for example, which is projected to be one of the worst performers.”
