CAPITAL WATCH: Investor pricing survey

UK investors are still mad for industrial property, the top pick to buy in this latest Colliers International and Real Estate Capital Investor Pricing Survey. The sector had the biggest compression in yields since the last survey, in July 2014: 50 basis points

Shopping centre yields also fell due to heavy demand, further closing the yield gap between prime and secondary malls. In line with other surveys, the respondents expect bumper UK property returns this year, revising their full-year capital growth predictions from 7.7% in July to 12.1%, with average rental growth expected to add 2.7%.

The average expected total return was 18.6%. However, respondents expect capital and rental growth to slow markedly in the next two years — by two-thirds next year in the case of capital growth.

The survey, carried out three times a year by Dr Karen Sieracki of KASPAR Associates and in its 21st year, provides detailed analysis of the industry’s capital and rental growth expectations. The 19.4% response rate this time was above average.

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