The UK economy has reached a stumbling block in its recovery, and delayed the ongoing recovery of a UK commercial real estate (CRE) market still grappling with restrictive monetary policy. However, real wage growth, falling interest rates and higher government spending will support economic growth over the next year.

• Recent business surveys indicate that many firms may be planning to scale back on staffing levels and pay rises, but at an aggregate level this should be offset by the positive impact of higher government spending. 
• There is a lot of uncertainty around the potential impact of the incoming US government’s trade policies, but in our view the impact on UK growth will be relatively limited.
• Meanwhile, inflation expectations have risen, leading to higher interest rates and repricing in the REIT market. 
• Nevertheless, the rate-cutting outlook is still intact, and key differences in market fundamentals compared to previous eras mean many investors may view this as an historic opportunity for value-add strategies.

To read more, download the full report.