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Total returns growth of 12 per cent predicted for UK commercial property in 2022

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Colliers predicts sustained total returns growth in 2022 of 12 per cent following a strong start to the year for the investment market - an upward revision from the 9.6 per cent growth rate it predicted in February.



In the latest Real Estate Investment Forecast report, the firm also highlights that while UK property yields in several sectors have fallen to record lows (e.g. London offices, industrial), the gap to gilts has not. Despite further increases in gilt rates this year, Colliers predicts a general hardening of property yields in 2022. At the all-property levels, yields will move from 5.15 per cent at the end of 2021 to 4.87 per cent this year. 

Oliver Kolodseike, director in the Research & Economics team at Colliers, comments: “Although gilt rates are rising and yields are still compressing, we believe that the gilt to yield gap will settle at around 270bps. Negative yield gaps as we have seen in some sectors in 2007 look unlikely given greater equity exposure. 

“After a very challenging 18 months during which travel restrictions prevented many overseas investors, especially from the Asia-Pac region, to physically inspect and view buildings, we are now seeing a return of this investor group. The global weight of capital will continue to drive demand for UK commercial real estate.”


The report notes that all-property total returns growth reached a six year high of 16.5 per cent last year, driven by industrial (+36.4 per cent) and retail warehouses (+21.9 per cent) and the firm expects sustained double-digit growth in 2022.
 

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Oliver Kolodseike

Director of Economics and Research

Research and Forecasting

London - West End

Oliver is Head of Economic Research and leads the quarterly UK forecasting process including the publication of Colliers' Real Estate Investment Forecasts (REIF) report. He also  authors the monthly Property Snapshot and, quarterly Scotland Snapshot. Prior to joining Colliers, he worked for the Centre for Economics and Business Research and IHS Markit. Oliver holds a BA in Economics from  Georg-August University Göttingen (Germany) and an MSc in Economics from Exeter University.

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Rebecca Allen

PR Manager

Marketing & Communications

London - West End

I have been working in commercial property communications for almost 10 years  having previously worked at CBRE and most recently Savills.

In my role at Colliers I am responsible for the PR of national capital markets, London agency and capital markets teams and investment property management.

My role includes:

  • Creating and exectuing PR plans for business lines that span press, marketing and digital channels
  • Media monitoring and reporting
  • Journalist relationship building through face to face meetings, phone calls day to day assistance with stories
  • Reputation management of the Colliers brand

 

 

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