July 2022: another 50bps, and rental yields wake up

While capital values softened, rents went vertical. National rents rose 9.5% YoY by July 2022 with combined-capitals advertised rents up 12.1% YoY. For investors with locked-in low fixed rates, cash-flow strengthened materially through 2022 even as headline values fell.

New-build assets — with depreciation envelopes intact and rents marked to the 2022 market — produced after-tax cash flows that older stock simply couldn't match.