Investors are increasingly turning to commercial assets in traditional destinations to make the best returns, it has been revealed. Capital Economics claimed that the sector is currently seeing "fairly healthy" demand for prime buildings.
It follows the release of a recent forecast by Standard Life Investments that the global commercial property market will offer investors close to double digit returns over the medium-term. The firm said that low interest rates and moderate economic recovery in many countries means that the relatively secure yields from real estate remains attractive.
And Ed Stansfield, property economist at Capital Economics, noted that he expected investors would be drawn to high yields available on property within popular areas.
He added that many investors still harbour concerns about the state of the economy in a number of destinations, however.
"The outlook for property is probably that more people are worried about the downside risk than the upside risk. That is reflected in the potential for higher interest rates and the public sector job cuts and the impact that is going to have on occupier demand," he said.