A wider ‘new normal’ property to bond yield spread?

We think that the all-property to bond yield spread will narrow from its current elevated levels, although this is not likely to happen before late 2020. But, structural changes mean that the property to bond yield spread won’t narrow to the early-1990s to mid-2000s average of 150bps. Nevertheless, there appears to be room for a 100bps or so increase in bond yields to be absorbed by the spread without a major rise in property yields.