UK property 'feeding frenzy' means looming over-valuation

Asset allocators are interpreting mixed signals from across the globe, but there are concerning signs of overheating in UK property and infrastructure assets, says Cornelian's Hector Kilpatrick

Some asset classes are beginning to exhibit signs of overheating. Government debt in many jurisdictions is simply too expensive. While it is difficult to identify a near-term source of inflation (given the recent collapse in commodity prices), labour markets are tightening in the US and UK. We are also concerned to see something of a feeding frenzy in parts of the UK property and infrastructure markets. Demand for commercial real estate in London is leading to strong rental growth which can sustain valuations for now, however a supply response is inevitable. Outside London, valuati...