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Property Returns on the Increase

LONDON-Property consultant Gerald Eve has upped its forecast for returns on investment in commercial property during 2003 to 7.9 % from 6.5% at the beginning of the year.

By Graham Parker | Updated on August 14, 2003

LONDON-Analysts at Gerald Eve are taking a more bullish stance on commercial property retuirns as 2003 goes on. At the beginning of the year they were forecasting a total return on commercial property of 6.5% this year. Now they say that continued investor demand–particularly from debt-driven private purchasers–is pushing up values, despite the fact that they believe there will be negative rental growth until 2005, and they are now forecasting a total return of 7.9%.

Retail is forecast to be the best performing sector in 2003 with a total return of 11.7%, although a slowdown in consumer spending is expected to have an adverse affect on performance next year. And the office sector is expected to be the worst performer in the short term due to a lack of rental growth in central London, but is expected to bounce back in the medium term.

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