Global real estate can shake off latest bond yield rises

Renewed rises in market interest rates across the UK, US and euro-zone have prompted questions about the implications for real estate. For now, we think the upside risk to property yields is small. We still anticipate government bond yields to fall back and the immediate threat to property valuations should be partially offset by the fact that other risky asset valuations look just as stretched. In fact, we continue to expect that global real estate will outperform other asset classes in the medium-to-long term.