March 1, 2018
The latest edition of the Investment Property Forum’s (IPF) UK commercial real estate consensus report claims that the commercial property sector’s sentiment for the current year continues to improve. In its latest report, IPF said the “outlook for 2018 has improved over the three months since the last survey” was conducted, with average rental and capital value growth rates increasing in virtually all sectors. It claims that the rental value growth average forecast has risen to 0.8 percent from 0.4 percent three months ago. Also, the average capital value growth rate has now increased to -0.2 percent from -0.7 percent in November with industrial growth now expected to be 4.0 percent from 2.7 percent in the last survey.
IPF said the 2018 average total return prediction has improved to 4.6 percent for the year, from 4.0 percent last quarter, reflecting an implied income return of 4.9 percent from 4.8 percent previously. IPF’s latest UK Consensus Forecasts report surveyed 23 property consultants and fund and investment management houses. Research firm Capital Economics said the IPF consensus has pushed up its forecast for all-property total returns this year, reflecting a less pessimistic outlook for rental growth.