Our latest baseline forecast incorporates the economic impact of the Russia-Ukraine conflict, which has led us to downgrade our real estate forecasts, albeit relatively moderately owing to the mainly indirect transmission channels.
What you will learn:
- Differences in regional performance have widened, with returns in Asia Pacific and North America less affected, whereas the impact on Europe will be greatest. Our forecast for eurozone all-property total returns is now 2.8% lower by end 2025 than under the previous baseline.
- The impact within Europe varies, depending on trade and energy market links – we lowered returns in Germany, France, and CEE by more than in the UK and Nordics.
- The key transmission channel for commercial real estate, just as it is for the broader economy, is through inflation via squeezed real incomes lowering demand and raising yields.
Return on investment,