12.3 The following chart illustrates the UK commercial property returns between 1981 and 2010. Percent per Year Capital Income 81 85 89 93 9 7 01 05 09 Note:Shaded areas indicate recessions. i) Read the chart, discuss what characteristics of commercial property investment do you learn from the chart. (6 Marks) ii) Discuss how would these characteristics influence the discount rate for commercial real estate in the UK. (6 Marks) iii) Explain why defalut-free real interest rates tend to be relatively high in countries with high expected economic growth. (6 Marks) 12.3 The following chart illustrates the UK commercial property returns between 1981 and 2010. Percent per Year Capital Income 81 85 89 93 9 7 01 05 09 Note:Shaded areas indicate recessions. i) Read the chart, discuss what characteristics of commercial property investment do you learn from the chart. (6 Marks) ii) Discuss how would these characteristics influence the discount rate for commercial real estate in the UK. (6 Marks) iii) Explain why defalut-free real interest rates tend to be relatively high in countries with high expected economic growth. (6 Marks)