Falls in alternative asset yields in Q3 meant valuations continued to improve for offices and retail, while they held steady for industrial. And the backdrop is supportive of property valuations in the coming quarters. Indeed, government bond and equity dividend yields are likely to remain low or edge down further, with monetary policy expected to remain loose and the economic recovery in 2021 allowing further gains in equities. Although the virus will weigh on investor demand in the near term, valuations should support some prime industrial and office markets further ahead. However, we think that prime retail yields will generally need to rise further to entice investors.
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