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Data Bite - Total Return Forecasts September 2021

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03 09 21 Total Return Forecasts September 2021

What:

The chart shows our latest commercial property performance forecasts which are published in the quarterly Real Estate Investment Forecasts (REIF) Report. The report contains forecasts for various indicators, such as total returns, rental growth and yields across all main sectors. The forecasts are based on the widely used MSCI data and may therefore not always accurately match market evidence. We note that there is a particularly large discrepancy between MSCI data and market evidence for some retail assets, with the MSCI data pointing to much shallower rental declines than we are seeing in the market.

Why:

The pandemic has led to a modest 2.3% decline in all property total returns in 2020, but growth will return this year and our forecasts suggest total returns growth of 9.0% in 2021. This is stronger than both our February (3.8%) and June forecasts (6.4%). The upward revisions are driven by unprecedent demand for industrial assets and stronger than expected yield compression in the quarterly MSCI index. In 2022 and 2023, we expect total returns growth of 6.2% and 5.4%. Over the five year forecast horizon, industrial and retail warehouses are predicted to be the best performing sectors.


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Data Bite - Total Return Forecasts September 2021

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Related Experts

Walter Boettcher

Head of Research and Economics

Research and Forecasting

London - West End

I am the the Chief Economist at global property advisors Colliers International based in London.  I am a research economist identifying timely research topics and directing research and forecasting outputs.

I have over 20 years UK and European property industry experience and extensive expertise across a wide range of property sectors and related industries.

I participate regularly in industry panel discussions, but am focused more on direct client engagement with institutions, property companies, banks, and private investors. A regular media commentator, I have a wide range of national and broadcast experience.

I joined Colliers International in August 2007 after several years at a private property company where he was responsible for managing a mixed portfolio of London residential, retail and office assets.

Previously, I worked in a few London property advisory firms, a geodemographic company as well as a few youthful sojourns in the US offshore oil industry, local government and entertainment business.

I am an economics graduate of the University of Texas at Austin and received his PhD from the Faculty of Science at University College London.  I am a member of Lambda Alpha International and the Society of Property Researchers.

Perhaps best known for my alternative take on property economics and investment, I am a keen proponent of UK regional development and infrastructure investment.

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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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