However Neil Chegwidden, Head of Research at Cluttons, is stillpositive about property's future performance. He forecasts that allproperty total returns could dip to 5% next year and return to 8%by 2003. But he points out that an 8% nominal return equates to a6% real return, which is higher than property's 4.4% long-termaverage.
'A very important feature of our forecasts is our belief thatyields will not weaken significantly from current levels' saidChegwidden. 'With such a large yield gap compared to gilts andequities, we believe there to be a yield ceiling that will protectproperty from unlimited downside risk,'
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