Investor Presentaiton
Spread between yield and bond
WIDE SPREADS TO BOND DON'T, BY THEMSELVES, MEAN GOOD VALUE
BUT THEY AT LEAST MEAN FAIR PRICING
Property and equity looks fair value compared to bond rates
Asset Yields to 10 year bond spread
10%
Low inflation/lower growth
High inflation/high growth
5%
0%
-5%
-10%
-15%
Low inflation/high growth
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Gross dividend yield (ASX)
Sydney Prime office to Bond
Assets priced off growth
have seen yields widen
relative to bonds i.e. more
"return" has to be delivered
from yield rather than
growth.
Hence, equities have
corrected the most.
Property/equities look fair
on this basis
CBRE
13
Source: RBA, CBRE Research
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