Unlike equities and bonds, there is a very direct relationship between GDP growth and the performance of properties through the channel of tenant demand. Typically, rental value growth responds some three quarters after economic growth, although the extent of the response is also dependent on other factors, such as availability of space in the existing stock and the rate of new development completions. While ecntral banks have been supporting investment values, they have done relatively little to boost business earnings and it is the lack of improvement in profitability that has caused demand for additional, as opposed to new, space to be relatively muted in this cycle. In turn, this has resulted in very limited rental value growth. Normally, rental value growth initially occurs at the prime end of the market, spreads to the broader core and eventually to the secondary part of the market. Undoubtedly, this will occur in some sub- markets, but these will be limited in number. More likely, new development will feed into the prime end of the market, and eventually through to the lower end. In the UK, London normally leads the rental recovery and this time is no exception. However, the lags have shortened over the last 20 years as the markets have become more transparent and globalised. There was a lagging response in the 1990s between London and continental Europe of two to four years. The 1990s rental cycle (from peak to the next peak) was 10 years in length, followed by a shorter cycle in 2000-2007. In the 2000s, the lags were shorter ranging from just under a year in Paris to three years in Frankfurt. Given the macro economic backdrop, this cycle is longer and weaker in its recovery. It took five years for rental values to start recovering. Assuming that businesses had adequate accommodation at the peak of economic output, this suggests that they have a surplus now. Tenants will need to re-absorb this surplus before again expanding and, in Europe, we are facing an overhang of vacant stock which will limit the strength of any rental recovery. Office vacancy rates are structurally higher but also are strongly diverging across the European markets. Based on previous cycles, we would have expected to see a stronger convergence in vacancy rates across the markets, which has been absent in this recovery given the differentiated economic backdrops. In previous cycles, prime rental value growth was triggered when vacancy rates hit frictional levels (for example, 6% in the West End and 5% in Greater Paris). This did not occur in this cycle given the overhang of obsolete stock. Paris in particular suffered from a weak recovery in demand combined with a large overhang of obsolete stock (40% estimated to be functionally obsolete). The supply side, is in part, determined by the absorption and release of buildings on the market by occupiers, and in part by new development. Development cycles over the past 30 years have been declining in strength. We believe that this structural decline reflects the maturation of the western European economies and a slowing growth in office employment, in large part reflecting the changing demographics as well as the exporting of work to emerging markets (e.g. call centres). Well before the pandemic, the London development cycle had peaked, with property companies and institutions becoming very cautious. The recovery from the recession of 2008/9 as been yield driven and not rental value driven. Tenants have used their balance sheet, which have been relatively strong up to the beginning of the pandemic for things other than expansion, sometimes acquiring other companies to consolidate their positions and sometimes (in the public markets) buying back their own shares. With corporate announcements of redundancies and cost-cutting, that is not going to change in the short-term. .