London real estate returns set to be lower in 2016. | KPMG | UK

London real estate returns set to be lower in 2016, says KPMG

London real estate returns set to be lower in 2016.

2016 real estate performance in London will rely much more on determinedly modest rental growth, with the result that total returns will be lower

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Commenting on what 2016 could bring for London’s real estate market, Stephen Barter, Chair of Real Estate Advisory at KPMG UK, said:

“Yield compression cannot go much further, as upward pressure on interest rates begins to build. So 2016 performance will rely much more on to date determinedly modest rental growth, with the result that total returns will be lower than for 2015. But equally, there is still a considerable volume of unsatisfied international capital seeking opportunities in London’s ‘safe haven’. However, going forward, these investors may start to be encouraged to look beyond London, and into the regions, for better pricing.”

ENDS

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