The MSCI U.K. Monthly Property Index’s total returns remained negative at the end of 2022, but the decline has moderated since October, when monthly returns fell to their lowest recorded level. The moderation was due to the declining impact of rising yields. Net initial yields had reached a record low at midyear and have since expanded sharply, as high inflation and rising interest rates make property look expensive and debt much more costly. Industrial property remained the underperformer, although the gap between industrial and the other core commercial segments narrowed from October.
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