Retail property forecast to outperform
Published: 12 February, 2010
Retail is tipped to be the top-performing property sector in the UK, according to a new economic forecast from BNP Paribas Real Estate.
BNP forecasts retail property will continue to outperform offices and industrial in 2010 and 2011, with retail capital values forecast to rise 4.5 per cent on average this year, followed by a further 1.3 per cent in 2011. And retail will continue to see capital values rise in the three years following 2011 with a predicted average growth in capital values of 6 per cent by 2014, a total average growth of about 12 per cent on today’s values.
BNP says the sector will also outperform in terms of rental growth, seeing an overall average fall of just under -1 per cent this year, compared with larger drops of over -7 per cent for offices and -4 per cent for industrials. Rental growth will then pick up in the retail sector in 2011 to 1.9 per cent with a larger accumulated rise of 14 per cent between 2012 and 2014.
Ian Parish, head of retail agency at BNP Paribas Real Estate, said: “Retail has had a tough time through the recession with administrations, CVAs, rent defaults and empty units plaguing the sector. However, prime high street and shopping centre units remain as attractive as ever."
