How could tighter ECB policy affect property yields?

Tighter monetary policy in the UK, US and euro-zone in the next couple of years will undoubtedly cause risk-free rates to rise. However, given that property’s yield spread against risk-free rates is still elevated, we think there’s room for a gradual closing of the yield gap before property yields rise. Conversely, similar-rated corporate bonds are likely to see a more immediate impact from increases in Bund yields.