Double-digit growth has been forecast for all property sectors across the UK for 2014, according to Strutt & Parker.


The firm’s research claims that demand from foreign investors will continue at similar levels to 2013, when 45% of transactions were undertaken by foreign buyers.


Offices are expected to see the highest total returns in 2014, at 13.6%, followed by industrial at 10.7% and retail at 10.2%.


Stephanie McMahon, head of research at Strutt & Parker, said: “Five years on from the downturn we are finally seeing signs of occupiers wishing to take better-quality space across the UK, resulting in a combination of rental growth and yield compression, leading to double-digit total returns this year across all real estate sectors.”


Retail has realigned itself in terms of economic changes, according to Strutt & Parker, but the increase in online retail, which now accounts for 12% of all retail spend, has created a polarisation between town centres that are able to attract residential, service and amenity demand and those that cannot.


Across the sector, capital growth is forecast to reach 5% in 2014, up from 3.2% in the previous year, while rental values are expected to rise by 1.3% in 2014, compared with no rental growth in 2013.


Industrial and manufacturing parks are predicted to have total returns of 10.7% and a small jump in capital growth to 4.4% in 2014, with rental growth of 2.2% this year, up from 0.6% in 2013.


Andy Martin, senior partner at Strutt & Parker, said: “Despite concerns over interest rates and more specifically bond rate rises, there is enough momentum in the market to maintain levels of activity, and the expectation of rental growth will help balance the figures.”