First, due to stable employment growth we expect to see sustained tenant demand for property. Second, inflation-adjusted or “real” interest rates are not only low if not negative, they remain below average suggesting limited capital market risk. Third, in contrast to the last decade, fiscal policy is less austere and in the case of the U.S. very supportive of economic growth. Fourth, despite the risk of rising short term rates by central banks, when viewed through the lens of history, even marginal increases in rates would lead to below average interest rates and positively-sloped yield curves which in turn, minimizes the risk of a recession. Fifth, while there are pockets of excess supply, new construction activity generally remains below average. Please click on the link below for further insights into our global outlook. We hope our views aid your investment efforts and please let us know if you have any questions.
Source : Deutsche Asset Management