Capital values set to rise over time

BNP Paribas Real Estate predicts that there will be a North-South divide when it comes to recovery, with the South growing quicker than the North.

Yorkshire's industrial market is expected to grow this year, the retail sector will grow next year and the office market will see growth in capital values in the medium term.

Speaking at the firm's economic seminar in Sheffield, Keith Steventon, head of research, said: "There is enough money floating around to ensure that all prime property types are likely to gain value in the coming years. We may even see yet higher gains in capital values in 2010 than we've already indicated – if there continues to be a shortage of prime assets available to satisfy the huge weight of demand from both UK institutional and overseas investors."

Rents are expected to fall across all property in 2010 before returning to modest growth in 2011 of 0.6 per cent. Yorkshire will begin to see improvement in all sectors by 2012, he predicted.

Mr Steventon said: "These forecasts demonstrate that real recovery is on its way in both the investor and the occupier market. In the next few years, this growth will continue and the tempting incentives currently being seen banded around will disappear. Now is certainly a good time for occupiers to move and investors to asset manage in order to gain even more value for their buildings in a rising market."