Retail and office pricing still unattractive

Property valuations improved for the seventh consecutive quarter in Q3, following another sharp fall in equities earnings yields. But this was the smallest rise in valuation scores this year and changes so far in Q4 point to a partial reversal.  All four sectors now look undervalued, but outside the industrial sector, the short-term outlook looks tough. And, while apartments may also weather the storm reasonably well, we think office and retail assets need to see further yield rises before they truly represent good value.