We expect real estate yields to spike this year due to both a rise in the property risk premium and lower expectations for property income streams. However, breaking down the observed yield gap into rental predictions and the risk premium has more than its share of difficulties. As a result, we use the CBOE VIX to support our analysis of the likely path of all-property yields over the next 12 months. This is consistent with our forecast for a peak-to-trough yield rise of around 30-40bps.
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