M&G’s mid-year Global Outlook report highlights the impact of rising inflation and interest rates on real estate markets

With inflation fast becoming a global phenomenon on a scale not seen for decades, investors everywhere are galvanised to reconsider their property strategies. According to M&G’s mid-year Global Real Estate Outlook report — which examines the implications for real estate — real assets, like property, are well positioned to capture the potential upside of rising inflation. But with increasing occupier demands, landlords will need to work assets to achieve income growth - and portfolios with long-term inflation protection.

Reopening economies and rapid recovery have brought about supply chain disruption, labor shortages and inflationary pressures. But the factors affecting inflation globally have increased in number and duration during the past six months. The war in Ukraine has introduced fresh uncertainty — although the greater risk aversion and higher prices stemming from this are exacerbating, rather than causing, underlying inflation. The path of the wa