NCREIF Property Index (Q4 2022)

The 4.45% hit to all-property capital values in Q4 was more substantial than our end-2022 forecasts implied, although recent news of bigger valuation markdowns in December made this less of a surprise. And, despite Q4’s fall, we still expect the first half of 2023 to see further substantial falls in capital values as valuers adjust cap rates higher to reflect the bigger discounts that are already being seen in the market. Notably the retail sector and the southern region were the outperformers amongst the four main sectors and the four regions respectively, both trends that we expect to persist in 2023.