REIF in brief Q2 2013

Forecast Assumption 

• The economy shows signs of a weak but sustained recovery. Weak fundamentals and on-going austerity will keep tighter monetary policy firmly off the MPC agenda. Mark Carney has initiated forward guidance to keep rates low and accommodate growth.
   
• Although economic fundamentals remain weak, improved sentiment will enhance risk appetite across all property asset classes. Private investors (domestic and foreign) and property companies will continue to acquire higher yielding properties at a measured pace, capitalising on the yield differential between London and the regions, prime and secondary.
   
• Overseas investors will continue to drive the Central London market, pushing down yields and driving overall volumes. UK institutions will remain largely “priced-out” of the capital and will continue to look to the regions, predominately the South East, for core and core+ opportunities.
   
• As the economic recovery gains traction, shareholder pressure may initiate a new phase of corporate investment. As a result occupier markets will strengthen, and lack of supply will create rental pressure. This will persist until lending markets improve and development increases.