Deterioration in valuations likely to prove temporary

The uptick in government and corporate bond yields in Q4, coupled with the continued decline in property yields, resulted in a deterioration in the relative valuation of commercial property markets in Europe. That said, less than a third of all markets look overvalued. And given the recent financial market fallout caused by the COVID-19 outbreak, which has seen equity prices and government bond yields tumble, property valuations should improve in Q1.