Property trumps bonds in hunt for yield

Potential interest rate rise in 2014 could prompt flight from fixed income into commercial property.

Rising yields and the possibility of sooner-than-expected interest rate rises is encouraging investors to move away from fixed income towards commercial property. Bank of England Governor Mark Carney has previously said the central bank will consider an interest rate rise when unemployment reaches 7%. Unemployment fell from 7.7% to 7.6% in the third quarter of 2013; the Bank’s projections now include the possibility of a rate hike by either the third quarter of 2015 or even as early as the fourth quarter of 2014.  It is becoming increasingly difficult to find value in some areas of...