New Delhi, Nov. 13 -- Fitch Ratings has maintained its 'neutral' outlook on the European real estate sector, citing strong market fundamentals and expectations of short-lived interest rate hikes that are likely to support broadly stable property valuations, the ratings agency said in a report.

The report noted that a sharp correction in property valuations is unlikely, as asset values have already adjusted to the higher interest rate environment during 2022-2023.

It further highlighted that rental growth in 2027, driven by inflation-linked lease agreements outside the UK, is expected to offset potential valuation pressures from rising yields in certain segments, limiting the overall impact on property values.

"Fitch Ratings has maintai...