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Strengthening economy to provide commercial property boost | 1 February 2013

Returns on commercial property investments could reach close to double figures over the coming years, commercialnewsmedia.com reports.

The forecast came from BNP Paribas Real Estate, which revealed its findings at its inaugural Capitalise event for global investors.

According to the firm, global economic growth in 2013 will boost net trade values in the UK. This will then strengthen over the years to follow, averaging a two per cent growth between 2014 and 2016.

This upward trend is expected to begin this year, as 2013 is forecast to mark the point when speculative investment starts returning to British core markets.

Where returns are concerned, this improvement in investor figures will see further growth. Over the next five years, the average return looks set to be in the region of eight per cent; perhaps even higher still if the predicted tail-off in 2017 does not materialise.

Speaking to shdlgistics.com of the figures, head of research at BNP Paribas, Claire Higgins, explained: “By 2015, when the economy reaches above trend growth, commercial property total returns will rise to above ten per cent.

“As consumer expenditure rebounds, well-priced retail product with asset management potential will be increasingly attractive to investors. The industrial sector will also see a steady performance throughout the next five years, producing double-digit returns in 2015 but in large part due to high income returns.”

The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.

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