The recovery will continue to accelerate

The commercial property market is in something of a “sweet spot” at present, with improved investor confidence and low interest rates supportive of yield falls, and the growing economy likely to kick-start a rental value recovery.  After an increase of 4% last year, and driven by further falls in yields, we expect IPD all-property capital values to rise by 8% this year.  A rent-driven gain of 5% is likely in 2015.  This translates into total returns of about 14% and 11% respectively.  These forecasts are both above consensus and unchanged from the previous Analyst.