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Real estate return expectations rise for 2015

Real estate investors are forecasting a 9.1% total return for the NCREIF Property index in 2015, up from 8.6% from a quarter ago, according to the Q4 Pension Real Estate Association Consensus Forecast survey. Projections for 2016 and the annualized return through 2018 were unchanged at 8% and 8.4%, respectively.

The largest projected increase by property type was in apartments – according to the Q4 survey, apartments are expected to return 8.6% in 2015 (up 70 basis points from the Q3 survey). Industrial (9.5% expected return) and office (9.2% expected return) properties were both boosted by 60 basis points from the prior survey.

Retail’s 9.2% forecast return in 2015 was up 0.2 percentage points from Q3.