Investors remain concerned and cautious as we head into 2024, following more than a year of negative returns and a dearth of liquidity. While visibility on economic growth and interest rates may be improving, a fog still envelops price discovery.

The confusing picture on pricing is caused chiefly by a dislocation in the expectations of buyers and sellers. In a number of markets, the fall in valuation index markers has been greater than for price indices, further blurring price discovery. For some, this is surprising, as valuation indices are often taken to be backward-looking, smoothed and lagging behind actual transaction prices.

Part of the issue is there has not been a huge amount of distress to date. The transactions that are taking place have often involved better quality assets. Lesser quality properties have not, so far, been forced onto the market through refinancing problems. Given the higher quality assets transacting, there may be a slight upward positive qu