UK commercial property update and outlook
Valuation yields across all sectors continued to plateau in May and have effectively been unchanged for the entirety of 2023. The outlook for the real economy has been downrated given the more hawkish outlook for interest rates, which will present challenges for most occupiers across all segments. However, the lack of development supply will help underpin rents in some instances. A lack of trades makes it difficult to point to transactional evidence, but the sharp rise in the cost of debt means All Property yields are forecast to soften a further 50bps this year and generate a second year of negative total return.