Fears over the stumbling Chinese economy may be overstated and commercial property is not due a correction, according to research company Capital Economics.
In its latest Commercial Property Update report on 21 January, the company says commercial property will continue to see strong activity and returns in 2016, but urged caution should equity price falls become prolonged.
Negative sentiment on Chinese growth is misplaced it believes, stating that below 4% growth in the first half of 2015 was replaced by renewed activity in the second half.
In addition, support for policy intervention has grown and with industrial output stabilising the company sees actual growth rates improving to 6.5% in 2016.
The combination of a strengthening China and what looks to be persistently low interest rates should therefore help the real estate markets over the coming year as investors head to higher yielding assets.
The risk to real estate, said Capital Economics, came from a persistent drop in other asset prices, which could make real estate look an expensive investment, causing some capital to pull out of the market.
To send feedback, email mike.cobb@estatesgazette.com or tweet @MikeCobbEG or @estatesgazette
