Bond sell-off adds to concerns for Spanish and Italian property prices

To the extent that the latest sell-off in Spanish and Italian bonds prompts investors to steer clear of commercial property in either market, the resultant drop in liquidity is likely to put upwards pressure on property yields. In any event, with Italy back in recession and Spain heading that way, fresh, steep falls in all-property capital values in both markets look likely over the next couple of years.

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