The latest raft of economic data provides cause for optimism, and financial market indicators add further credibility to the view that commercial real estate pricing is at a turning point.
That said, deeper analysis suggests there are a number of structural challenges to the new government’s mission to boost economic growth.
- Further declines to core inflation, robust labour market data and strong GDP growth have led to upward revisions to economic growth forecasts.
- However, the economy still faces challenges around labour supply, government finances and productivity growth.
- Bond yields have fallen in response to recent UK and US economic data, further enhancing the attractiveness of UK CRE pricing. Meanwhile, REITs have performed strongly – a key indicator of recovering capital values in the months to come.
Robust growth and retail spending data are acting as tailwinds for retail rental growth, and fuelling ever-stronger investor demand for the Living sector.
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