Positivity around Britain’s commercial property market grew during the three months to August, according to research by the Investment Property Forum (IPF).
In its latest UK Consensus Forecasts, a forward-looking study of market performance by more than 25 fund managers and advisers, IPF said sentiment had improved rapidly.
Pam Craddock, IPF research director, said: “There has been a marked uplift in sentiment, particularly towards London offices, in recent months, which underlines the strong fundamentals of UK real estate.
“Market volatility has hit many different asset classes recently, and, at such times, real assets traditionally perform well.”
Returns from City offices are estimated to reach 19.9% this year.
Total returns from West End offices could hit 18.8% this year, fuelled by rising demand for prime London space.
Offices are predicted to offer total returns of 17.9%, with industrials at 15.4% and standard retail at 12.1%.
The five-year estimated total return for all property is estimated to be at 7.4%, of which 2.4% is capital growth.
Although many fund managers have exited the UK capital to invest in the regional markets, strong interest has persisted from foreign investors, with London seen as a safe haven.
IPF said this had caused prices to soar and yields to compress.
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