Aviva Investors raises commercial property forecasts

Aviva Investors has raised its annual forecast for returns from commercial property to 8.9% over the next five years, despite the threat interest rates may rise as early as this year.

The group has upgraded its forecast from 6.5% per annum for 2014-2018, arguing the recovering economy and the high yields still on offer from the asset class will drive investment and flows. Chris Urwin (pictured), global research manager, real estate, said:  “We have raised our annual average total return forecast for UK commercial real estate between 2014 and 2018 as factors influencing the near-term outlook for the asset class have strengthened. “Real estate still remains attractively priced relative to other income-producing assets, and we expect capital growth to remain strong in...