In plain terms: right now the model likes Industrial best on value, and is most wary of Retail. Looking five years out, it expects Industrial to earn the most — about 8.7% a year — while Retail trails at roughly 6.8%. Why are property values under pressure? Because the ten-year government bond now pays around 4.8%. When something as safe as government debt pays that much, a building has to offer more to tempt a buyer — and that quietly drags values down. What's holding them up is the steady wave of overseas money still buying in — the one signal we've actually proven moves prices. The table below is that same picture, in numbers.
The numbers, by sector
| Sector | Cap rate now | Fair value | 5-yr return | Worst case |
|---|
| Office | 6.32% | 6.98% | 7.9% | -17% |
| Retail | 5.59% | 6.71% | 6.8% | -19% |
| Industrial | 5.40% | 5.91% | 8.7% | -10% |
| All Property | 5.55% | 6.53% | 7.4% | -17% |
| Alternatives | 5.87% | 6.53% | 8.2% | -14% |
A quick guide: "cap rate" is the yearly rent as a share of the price — like an interest rate on a building; a higher number means cheaper. "Fair value" is what our model says that rate should be given today's interest rates. "Worst case" is a bad-but-realistic five-year fall in value.
Cheapest to priciest, the order runs Industrial then Alternatives then Office then All Property then Retail. We
hunt for value, not hype — the best long-run buys tend to be where the crowd has already sold off.
Independent
research — we don't develop, invest in or broker property, and every figure is built from public data.
How it's built →