Slight worsening in property valuations

On our measure, property looked slightly worse value relative to bond and equities in Q2. The worsening was due to a marked fall in property yields, driven by the industrial sector. Outside of over-valued industrial, all other property sectors remained either undervalued or fairly valued. Looking ahead, our view is that gilt and property yields are likely to stay close to their current levels in the coming quarters, which should keep valuations steady.