UK commercial property update and outlook
May 2023
All Property quarterly total return continued to trend upwards in April to 1%. After rising substantially over the back-end of 2022 commercial property yields have effectively plateaued since February. However, recent core inflation data surprised on the upside and expectations have turned sharply more hawkish for a substantially higher peak in interest rates. Live investment deals so far appear to be relatively unaffected, but it seems unavoidable now that the previous yield “peak” will now likely be an inflection point before some further outward softening in H2 2023.
